Global energy and CO2status report - 2017 1 OECD/IEA2018Key findings Energy Global energy demand increased by 2.1 in 2017, compared with 0.9 the previous year and 0.9 on average over the previous five years. More than 40 of the growth in 2017 was driven by China and India; 72 of the rise was met by fossil fuels, a quarter by renewables and the remainder by nuclear. Carbon dioxide CO2 Global energy-related CO2 emissions grew by 1.4 in 2017, reaching a historic high of 32.5 gigatonnes Gt, a resumption of growth after three years of global emissions remaining flat. The increase in CO2 emissions, however, was not universal. While most major economies saw a rise, some others experienced declines, including the United States, United Kingdom, Mexico and Japan. The biggest decline drop came from the United States, mainly because of higher deployment of renewables. Oil World oil demand rose by 1.6 or 1.5 million barrels a day in 2017, a rate that was much higher than the annual average of 1 seen over the last decade. An increasing share of sport-utility vehicles and light trucks in major economies and demand from the petrochemicals sector bolstered this growth. Natural gas Global natural gas demand grew by 3, thanks in large part to abundant and relatively low-cost supplies. China alone accounted for almost 30 of global growth. In the past decade, half of global gas demand growth came from the power sector; last year, however, over 80 of the rise came from industry and buildings. Coal Global coal demand rose about 1 in 2017, reversing the declining trend seen over the last two years. This growth was mainly due to demand in Asia, almost entirely driven by an increase in coal-fired electricity generation. Renewables Renewables saw the highest growth rate of any energy source in 2017, meeting a quarter of global energy demand growth last year. China and the United States led this unprecedented growth, contributing around 50 of the increase in renewables-based electricity generation, followed by the European Union, India and Japan. Wind power accounted for 36 of the growth in renewables-based power output. Electricity World electricity demand increased by 3.1, significantly higher than the overall increase in energy demand. Together, China and India accounted for 70 of this growth. Output from nuclear plants rose by 26 terawatt hours TWh in 2017, as a significant amount of new nuclear capacity saw its first full year of operation. Energy efficiency Improvements in global energy efficiency slowed down dramatically in 2017, because of weaker improvement in efficiency policy coverage and stringency as well as lower energy prices. Global energy intensity improved by only 1.7 in 2017, compared with an average of 2.3 over the last three years. Global energy and CO2status report - 2017 2 OECD/IEA2018Overview Global energy demand 2017Global energy demand grew by 2.1 in 2017, according to IEA preliminary estimates, more than twice the growth rate in 2016. Global energy demand in 2017 reached an estimated 14 050 million tonnes of oil equivalent Mtoe, compared with 10 035 Mtoe in 2000. Fossil-fuels met 70 of the growth in energy demand around the world. Natural gas demand increased the most, reaching a record share of 22 in total energy demand. Renewables also grew strongly, making up around a quarter of global energy demand growth, while nuclear use accounted for 2 of the growth. The overall share of fossil fuels in global energy demand in 2017 remained at 81, a level that has remained stable for more than three decades despite strong growth in renewables. Improvements in global energy efficiency slowed down. The rate of decline in global energy intensity, defined as the energy consumed per unit of economic output, slowed to only 1.71in 2017, much lower than the 2.0 improvement seen in 2016. The growth in global energy demand was concentrated in Asia, with China and India together representing more than 40 of the increase. Energy demand in all advanced economies contributed more than 20 of global energy demand growth, although their share in total energy use continued to fall. Notable growth was also registered in Southeast Asia which accounted for 8 of global energy demand growth and Africa 6, although per capita energy use in these regions still remains well below the global average. Average annual growth in energy demand by fuel 1Corrected 23 March 2018 from 1.6 to 1.7 -10123-10001002003002006-2015 2016 2017MtoeRenewablesNuclearGasOilCoalNet growth rate right axisGlobal energy and CO2status report - 2017 3 OECD/IEA2018CO2emissions Global energy-related CO2emissions rose by 1.4 in 2017, an increase of 460 million tonnes Mt, and reached a historic high of 32.5 Gt. Last year’s growth came after three years of flat emissions and contrasts with the sharp reduction needed to meet the goals of the Paris Agreement on climate change. The increase in carbon emissions, equivalent to the emissions of 170 million additional cars, was the result of robust global economic growth of 3.7, lower fossil-fuel prices and weaker energy efficiency efforts. These three factors contributed to pushing up global energy demand by 2.1 in 2017. The trend of growing emissions, however, was not universal. While most major economies saw a rise in carbon emissions, some others experienced declines, such as the United States, the United Kingdom, Mexico and Japan. The biggest decline came from the United States, where emissions dropped by 0.5, or 25 Mt, to 4 810 Mt of CO2, marking the third consecutive year of decline. While coal-to-gas switching played a major role in reducing emissions in previous years, last year the drop was the result of higher renewables-based electricity generation and a decline in electricity demand. The share of renewables in electricity generation reached a record level of 17, while the share of nuclear power held steady at 20. Global energy-related CO2emissions, 2000-2017 In the United Kingdom, emissions dropped by 3.8, or 15 Mt, to 350 Mt of CO2, their lowest level on record back to 1960. A continued shift away from coal towards gas and renewables led to a 19 drop in coal demand. In Mexico, emissions dropped by 4, driven by a decline in oil and coal use, efficiency gains in the power system, strong growth in renewables-based electricity generation and a slight increase in overall gas use. In Japan, emissions fell by 0.5 as increased electricity generation from renewables and nuclear generation displaced generation from fossil-fuels, especially oil. Overall, Asian economies accounted for two-thirds of the global increase in carbon emissions. China’s economy grew nearly 7 last year but emissions increased by just 1.7 or 150 Mt thanks to continued renewables deployment and faster coal-to-gas switching. China’s CO2emissions in 2017 reached 9.1 Gt, almost 1 higher than their 2014 level. While China’s coal demand peaked in 2013, energy-related emissions have nonetheless increased because of rising oil and gas demand. 5101520253035GtCO2CO2emissionsIncrease 2016-17Global energy and CO2status report - 2017 4 OECD/IEA2018Global GDP, energy demand and energy-related carbon dioxide emissions, 2000-2017 In India, economic growth bolstered rising energy demand and continued to drive up emissions, but at half the rate seen during the past decade. India’s per-capita emissions last year were 1.7 tCO2,well below the global per capita average of 4.3 tCO2. Emissions in the European Union grew by 1.5, adding almost 50 MtCO2, reversing some of the progress made in recent years mainly due to robust growth in oil and gas use. The rate of energy intensity improvement slowed to 0.5, down from 1.3 the previous year. Southeast Asian economies also contributed to the rise in emissions, with Indonesia leading the growth with an increase of 4.5 relative to 2016. The growth in energy-related carbon dioxide emissions in 2017 is a strong warning for global efforts to combat climate change, and demonstrates that current efforts are insufficient to meet the objectives of the Paris Agreement. Change in energy-related carbon dioxide emissions by selected region, 2017 The IEA’s Sustainable Development Scenario charts a path towards meeting long-term climate goals. Under this scenario, global emissions need to peak soon and decline steeply to 2020; this decline will now need to be even greater given the increase in emissions in 2017. The share of low-carbon energy sources must increase by 1.1 percentage points every year, more than five-times the growth registered in 2017. In the power sector, specifically, generation from renewable sources must increase by an average 700 TWh annually in that scenario, an 80 increase compared to the 380 TWh increase registered in 2017. Carbon Capture, Usage and Storage CCUS plays an important role for reducing emissions in the industry and power sectors. Global energy and CO2status report - 2017 5 OECD/IEA2018Oil Global oil demand rose by 1.5 million barrels a day mb/d in 2017, continuing a trend of strong growth since prices fell in 2014. The rate of growth of 1.6 was much higher than the average annual growth rate of 1 seen over the past decade. One of the main drivers of growth was the transport sector. Vehicle ownership levels increased in 2017, as did the share of Sport Utility Vehicles SUVs and other large vehicles. This was particularly visible in the United States, where the share of SUVs and light trucks increased from 47 in 2011 to around 60 of total sales in 2017, bringing up the share of these vehicles in the total passenger car fleet to almost half. It is also a factor in the European Union, where oil demand increased by 2, the highest rate of growth since 2001. Average annual growth in oil demand The trend towards larger vehicles has also slowed the pace of decline in average vehicle fuel use, partly offsetting energy efficiency policy efforts. Electric cars are making rapid inroads in many markets, particularly in China, which is leading global sales. For now, however, the strong growth in electric-car sales remains too small to make a dent in oil demand growth. An updated analysis will be included in the IEA’s next Global EV Outlook, to be released in May. Another reason behind robust demand growth is oil used as a petrochemicals feedstock. Petrochemicals are the fastest-growing source of oil demand, notably in the United States, where the shale revolution has created very cost-competitive domestic supplies, as well as in China and in other emerging economies, where demand for plastics and other petrochemical products is growing rapidly. It should be noted, however, that the oil use in the petrochemicals sector only has a very small impact on emissions trends as most of the oil is not combusted but transed into other products, such as plastics. Around 60 of the growth in oil demand came from Asia. Although China is the leading global market for the sales of electric cars, it was also the top contributor to oil demand growth, followed by India. Meanwhile, oil demand in the Middle East, a recent source of demand growth, was flat due to oil-to-gas switching in the power sector and efforts to re oil product prices and phase out subsidies. While a slowdown in oil demand growth may be likely in coming years, there are no signs of a peak in demand anytime soon. As noted in the IEA’s recent World Energy Outlook and Oil 2018 reports, it is too soon to write the obituary for oil. 0.51.01.52.00.51.01.52.01985-2005 2006-2015 2016 2017mb/dOilNet growth rate right axisGlobal energy and CO2status report - 2017 6 OECD/IEA2018Natural gas Natural gas demand grew by 3 in 2017 thanks to abundant and relatively low-cost suplies, as wel as fuel switching in key economies, significantly above the average growth of 1.5 of the last five years. China alone accounted for nearly 30 of global growth – with more than 30 bcm out of a total of nearly 120 bcm. This signals a structural shift in the Chinese economy away from energy-intensive industrial sectors as well as a move towards cleaner energy sources, with both trends benefiting natural gas. As part of the official policy drive to “make China’s skies blue again,” there has been a strong push to phase out the practice of burning coal in industrial boilers especialy those in and around major cities as wel as reduce coal use for residential heating. China’s surging gas demand means that it absorbed much of the slack in LNG markets, pushing up international spot prices for gas in the later part of the year. Average anual growth in global gas demand The European Union also saw strong growth in gas demand, with consumption up around 16 bcm in 2017, albeit less than in 2016. Some of this increase was weather-related, for instance due to a por year for hydropower. Demand from industry also reportedly picked up on the back of stronger economic activity. Gas consumption in the European Union is stil more than 10 below the peak sen in 2010. Gas imports were near historical highs as domestic production tapered off, for example in the Netherlands. In the United States, gas-fired generation in 2017 fel by 8, or 10 TWh, offsetting half of the increase in gas demand for electricity generation elsewhere. The case of the United States last year highlights the importance of relative prices in determining emisions intensity trends in the power sector a slight rise in the natural gas price in 2017 saw gas-fired generation squezed by both renewables and coal. The composition of gas demand growth is changing. In the past decade, half of global gas demand growth came from the power sector. In 2017, over 80 of the growth came instead from industry and buildings. The power sector remains the largest single component of global demand, but this share is likely to decline gradualy. 3060901201502000-2016 2017bcm Industry,buildings,transport,oil and gasown usePowergeneration48521585Global energy and CO2status report - 2017 7 OECD/IEA2018Coal Global coal demand rose in 2017 by 1 to 3 790 Mtoe after two years of decline, the main change in global energy demand trends last year. Coal demand decreased by 2.3 in 2015 and 2.1 in 2016, led by lower demand in the power sector in key markets such as China and the United States. The rebound in coal demand in 2017 was driven entirely by an increase in coal-fired electricity generation, which drove up coal demand for power by nearly 3.5 compared to the previous year, while declining global coal use in industry and buildings offset half of the growth in coal use in electricity generation. Average anual growth in global coal demand Asia acounted for the largest increase in coal demand, up 35 Mtoe relative to 2016. China coal-fired electricity generation increased to meet a 6 growth in electricity demand, even as the economy is moving towards a les ener