The IEA says the rebound in gas demand threatens international climate targets

Global demand for natural gas is set to rebound, threatening to undermine the climate goal of achieving net zero emissions by 2050, the International Energy Agency said yesterday. More than 190 countries have signed up to the Paris Agreement, which aims to limit global warming to 1.5 degrees Celsius, which will require significant reductions in the use of fossil fuels such as coal natural gas.

In its newer gas outlook, the IEA says gas demand will rebound strongly in 2021. With the global economy experiencing a record decline in 2020 due to COVID-19 restriction-related measures, natural gas demand is expected to grow by 3.6% in 2021 as the economy recovers. Natural gas demand will grow at an average annual rate of 1.7 percent between 2022 2024, which means the market will be too high to meet the IEA's goal of achieving net zero emissions by 2050.

In May, the IEA unveiled a path for the energy sector to achieve net zero emissions said investors should finance new oil, gas coal supply projects. But according to more recent reports, new needs can be met through projects that were approved under development before the outbreak. Global gas prices have surged to multi-year highs over the past month as high temperatures drive demand for electricity in the northern hemisphere regions such as Asia seek to boost gas inventories ahead of winter.

Benchmark gas prices in Europe are expected to be $9.50 per million British thermal units this year, the highest since 2013, the report said. Spot LNG prices in Asia are expected to average $11 per million British thermal units, the highest since 2014.

In its report, the IEA said the gas industry should do more to reduce emissions, such as addressing methane leaks.

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Source: International Gas Network