Report: Gas and clean energy targets in jeopardy

The International Gas Union (IGU, Snam and Rystad Energy have released the 2024 Global Gas Report (GGR). The sixth annual edition of the Global Gas Report is a collaborative effort by IGU, which represents the global gas value chain with members in over 80 countries, and Snam, Europe’s leading operator in natural gas transport, and is produced by independent research and energy intelligence company Rystad Energy. The report seeks to deliver global gas industry insights about the sector and to inform its stakeholders, partners, and global decision makers about the state of play today, highlighting future priorities.

According to the report, global gas markets remain in a fragile equilibrium, with supply growth up by only 1.5% in 2023, as demand rises steadily, with an expected acceleration to 2.1% by the end of 2024. Asia continues to be the key engine of this growth, while North America and the Middle East are in the lead on exports.

Should gas demand continue to grow without further production development, as it has in the last four years, the report predicts a 22% global supply shortfall by 2030. If demand continues to strengthen, the shortfall will be more pronounced, underscoring the need to scale up investments.

The report goes on to note a continued rise in energy demand in developed and developing regions, alongside an increase in 2023 in coal burning, which remains the biggest source of global energy emissions. If current trends persist, 2030 targets outlined in policy driven decarbonization scenarios will most likely be missed.

In fact, despite efforts to enhance efficiency and ongoing industrial decline, the report notes that Europe has experienced energy demand growth, and in North America, energy demand has surpassed 2019 levels and continues to climb, fueled by the transport sector and AI data centers. Asia’s demand is also surging, particularly in the industrial sectors of India and China. Africa’s energy demand is growing faster than in most regions, driven by urban development, though it still falls short of the levels required for full energy access.

To contain the growth of greenhouse gas emissions and to make the global gas market equilibrium resilient, the report said it is critical to enhance investment in natural gas supply and scale up biomethane, carbon capture and storage (CCS) and low-carbon hydrogen technologies. It cites natural gas as being able to provide an immediate opportunity to cut emissions from coal by 50% and from oil by 30% through cost-effective switching.

Biomethane can serve as a direct substitution for natural gas. However, its scale is significantly below potential at roughly 1% of the natural gas market, the report pointed out, and it is primarily produced in North America and Europe, though new centers of production are emerging in hubs like China and India.

CO2 capture capacity is also gaining momentum, but like biomethane and low-carbon hydrogen, its scale is well below what is needed. The report suggests such technologies will play a critical role in decarbonizing energy supply (especially in hard-to-abate sectors) and ensuring its resilience. Urgent investment and enabling policies to start building the growing volumes of project proposals will be needed to scale the technologies to meet demand.

“Energy and gas demand continue to grow, driven by improving living standards in the developing world, new demand trends and ongoing growth in developed regions,” IGU President Mme Li Yalan commented. “We must look for a realistic way to balance these trends with long-term sustainability goals, such as building a diversified energy system, and comprehensive approaches to tackle climate change. Embracing innovative solutions and flexible policies will be key to navigate this highly uncertain energy landscape.”

“In this continuously evolving transformation, natural gas and related infrastructure represents a critical element of sustainable resiliency for the global energy system, while new green and low carbon molecules will play an essential role to achieve a just and technologically neutral transition,” added Snam CEO Stefano Venier.

Rystad Energy CEO, Jarand Rystad, agreed, noting, “Natural gas, now 30% of the fossil fuel mix, is cheaper and cleaner than oil and coal, with emissions significantly lower than both. As global LNG access expands, natural gas is on track to surpass coal by 2030 and oil by 2050. We’re proud to support IGU and Snam in detailing these key market trends and the future trajectory of natural gas.”