DNV believes that 2024 will be the year of peak CO2 emissions from coal, oil and gas, the class society says in its latest annual energy transition report.
According to DNV, emissions from energy are about to begin a long decline, and will be cut in half by midcentury. While half sounds like a success for the green transition, it is still only halfway to "net zero," and will likely propel the climate to about 2.2 degrees Celcius of warming by the century's end, DNV predicts.
The driving force behind the emissions plateau is the dramatic drop in the cost of solar panels and lithium-ion batteries - a price drop attributable to Chinese manufacturers, which dominate the solar and battery-storage markets. The falling price of solar is driving coal out of the greenfield powerplant market, and solar installations increased by an astonishing 80 percent last year.
The cost of battery storage farms is also falling fast, so it is economically feasible for renewable power installations to deliver (stored) power in all conditions, around the clock. Cheaper batteries have also made electric cars much more competitive, especially in China, where the majority of drivers now buy battery-based vehicles. China's motorists will likely peak their gasoline consumption by 2025, according to Vitol, and might even achieve that milestone by the end of this year. Global passenger vehicle sales should follow China's lead and will likely be half-electric by 2031, DNV predicts.
"Solar PV and batteries are driving the energy transition, growing even faster than we previously forecasted," said Remi Eriksen, Group President and CEO of DNV. "There is a compelling green dividend on offer which should give policymakers the courage to not only double down on renewable technologies, but to tackle the expensive and difficult hard-to-electrify sectors with firm resolve."
Those sectors include shipping and aviation, which both require hydrogen-based fuels at scale. However, DNV has revised down its estimate for the trajectory of hydrogen-based fuels like green methanol and green ammonia, and now expects that they will make up about four percent of final energy demand by 2050. Carbon capture will likely handle about six percent of global emissions in the same timeframe, including an estimated 15 percent of all emissions from shipping (through onboard carbon capture and storage).
To speed up adoption of costlier green solutions for tough use cases like maritime, DNV suggests a global carbon price may be needed - like the bunker levy under consideration at IMO.
"Market forces alone cannot achieve the Paris Agreement's goal of keeping the temperature rise well below 2°C. While markets are often effective in promoting renewable electricity and EV uptake, they fall short in addressing costly and complex technological measures in other sectors," DNV's analysts concluded.
