London — The demand destruction caused by the coronavirus pandemic is set to cause global carbon dioxide emissions to fall by the most in human history, S&P Global Platts Analytics said in a report Wednesday.
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The massive drop in emissions also puts the world seven years ahead of schedule on an emissions path consistent with holding global warming to two degrees Celsius above pre-industrial levels by 2100, it said.
"Lockdowns related to [the pandemic] and the associated drop in global economic activity have slashed energy consumption over the year-to-date, and will continue to depress oil, coal and natural gas demand over the balance of year and beyond across virtually all sectors," Platts Analytics said.
Fossil fuel demand will fall by over 13 million barrels of oil equivalent/day in 2020, according to Platts Analytics' latest forecasts in its World Energy Demand model.
Platts Analytics sees oil demand shrinking by more than 8.5 million boe/d in 2020 as result of the outbreak. Meanwhile, coal demand is expected to fall 3.6 million boe/d and natural gas demand by 1.1 million boe/d in 2020, it said.
GLOBAL CO2 EMISSIONS TO DROP BY 5.5%
"As a result of this drop in demand, CO2 emissions from energy sector fossil fuel combustion are expected to drop by 5.5%" or 1.850 billion mt year on year in 2020, according to Platts Analytics.
"While this 5.5% decline pales in comparison to the double-digit plunges during the Great Depression (around 25%) ... and [at] the end of World War II (around 20%), the overall reduction in CO2 emissions from coronavirus in absolute terms is projected to be by far the largest in human history," it said in the report.
The transportation sector will account for nearly half the drop in overall emissions at 800 million mt due to the restrictions on mobility around the world, it said.
The power sector is projected to account for the next largest component at 550 million mt, with the fall in load having a variety of impacts on the fuel mix in power, depending on the market, it added.
"Decreases in other sectors are expected to be considerably smaller but still significant, with industrial/other sector emissions falling by approximately 290 million mt, and the residential/commercial sector down 180 million mt," it said.
SURGE AHEAD ON 2 DEGREES PATHWAY
The expected drop in CO2 emissions in 2020 is so significant that it puts the world on track to where it would have been in 2027 in terms of a two degrees Celsius global warming emissions trajectory.
"The projected drop in 2020 emissions far surpasses what is required on average over 2020-2050 to comply with 2 degrees Celsius warming targets," Platts Analytics said.
Platts Analytics Scenario Planning Service's 2 Degree Scenario calls for a 2.6% per year or 630 million mt/year fall in energy sector CO2 emissions on average over this period.
"In fact, 2020 emissions are on track to fall to levels equivalent to 2027 emissions on our 2 degrees scenario," it said.
Overall energy demand and emissions are expected to rebound after 2020, although the timing and trajectory of this recovery is uncertain as long as there are risks of another wave of infections, it said.
"However, we expect that the world has permanently lost at least two years of energy demand and emissions growth" due to the pandemic, it said.
This stalling of demand opens a window for clean energy technologies such as renewables, cleaner transportation and energy storage to catch up with overall demand growth, according to Platts Analytics.
"The challenge in this of course is that governments, companies and consumers will be in far more tenuous fiscal positions because of the pandemic, which can make ambitious commitments to clean energy more challenging, particularly given lower fossil fuel prices," it said.
"At the same time, with governments playing a central role in stimulus and recovery efforts, policy priorities will have the potential to advance climate agendas in ways that were not previously in play," it added.