For the first time, the International Energy Agency (IEA projects a decline in world consumption of fossil fuels even under its most optimistic demand scenario, the Stated Policies Scenario (STEPS). Under STEPS, demand peaks by 2030.
Driving the change is gas demand, where consumption is 15 percent lower by 2050 than in the 2021 report. High gas prices owing to the supply crunch has accelerated a shift toward renewables in Europe while stymying its potential as a transition fuel in emerging Asia.
The IEA does not expect major investment in pipeline infrastructure to alternative markets, resulting in a diminished role for Russia in international energy affairs. There is a possibility, however, that infrastructure projects such as Power of Siberia 2 take off and could boost flows eastward. Given the extent of investment in renewables required, renewables consumption could fall short of the amount required to offset the downgrades to gas consumption. Such factors could sp