P2N0 - Edition 19 - News And Views On The Drive Towards Net-Zero GHG Emissions

HEADLINES FROM MARCH 17 TO 31, 2025

Opening observations:

• China's CO2 emissions appear to have plateaued: The good folk at Carbon Brief have reported that "China's CO2 emissions in 2024 were lower than in the 12 months to February 2024". This news, and the continued development of renewable electrical energy capacity in China, represents sure progress.
• Critical metals and minerals: There is increasing activity from governments globally to secure critical metals and minerals. Critical metals and minerals are essential to continued progress of decarbonisation of activities, and the development of mine production capacity, and supply chains are essential to security. The increasing activity from governments, recognises the role of governments in this increasingly essential sector.
  
  In the European Union (EU), 47 projects are eligible for funding support to develop projects to produce and to supply critical metals and minerals across the Member States of the EU.
  
  In the US, an Executive Order requires the identification of mineral projects and for the acceleration of permitting of those projects to provide for mineral production on an accelerated basis.
  
  It is apparent that there is a role for governments more broadly.
• Natural Gas and Nuclear: As noted in Edition 27 of P₂N₀, it is no longer a matter for debate that natural gas and LNG, and nuclear energy, are essential to affordable, reliable, and sustainable sources of electrical energy globally. Natural Gas accounts for about 25% of global electrical energy generation, nuclear for about 10%, and renewables for about 30%.

News headlines:

• CSRD Reporting well and truly up and running: On March 28, 2025, the good folk at PWC published Insights form the first 100 CSRD reports.
  
  The publication provides an assessment of the first 100 CSRD reports delivered since the start of 2025. The publication does not contain any surprises, yet it is well-worth a read.
  
  While the author is not a fan of reporting for reporting's sake, it is fair to say that reporting can provide a framework for compliance and good governance.
• Methane data base at large: On March 28, 2025, BloombergNEF published its Methane Monitor: Global Super-Emitters. For those interested in the impacts of methane emissions, the Methane Monitor provides a helpful means of diagnosing methane emissions, and how to address them.
• International Energy Agency (IEA): During the second two weeks of March 2025, the IEA published:
  • On March 25, 2025, Grid congestion is posing challenge for energy security and transitions. The commentary provides examples, by country, of the challenges that are being faced. The challenges are summarised as follows:
    1. Electricity security relies on the smooth flow of electrons;
    2. Grid congestion problems are holding back energy transitions; and
    3. In addition to the augmentation and expansion of grid capacity, existing grid capacity needs to be used more efficiently.
  • On March 24, 2025, the Global Energy Review 2025 was published. The publication headlines:
    
    • the increased demand for energy, with demand for electrical energy increasing by 4.3%, including with increased demand to respond to the increased use of electrical energy for AI, cooling and EVs (EV car sales increased by 25%);
    • the 700 GW of renewable electrical energy capacity installed during 2024 represented 80% of the new generation capacity installed (with 80% of the 700 GW new renewable capacity, solar capacity); and
    • the increased demand for natural gas (including natural gas) was a record high.
    As noted recently, at its core increased demand is in response to the continued development of the economies of China and India.
    
    The author often refers to known dynamics and themes. The Global Energy Review 2025 notes the dynamics and themes outlined in Edition 22 of P₂N₀ to the extent that it relates to the Age of Electricity, Digital and Energy Infrastructure, and Photovoltaic Stepped Changes¹.
    
    By way of reminder, in October 2024, World Energy Outlook 2024 (WEO2024). The World Energy Outlook publications from the IEA are one of a handful of publications each year that may be regarded as flagship reports.
    
    WEO2024 provided a sure-footed assessment of the dynamics as follows:
    • Energy security and avoidance, reduction, and removal (ARR) of GHG emissions are under stress because of political fragmentation and geopolitical tensions.
    • In the context of energy security and ARR of GHG emissions uncertainty, data-driven analysis is required, with increased focus on sensitivity on the deployment of renewables, increased electrical energy efficiency, increased electrical energy because of AI, and increased use of LNG to provide energy security.
    • While political fragmentation and geopolitical tensions abound, "underlying market balances are easing, setting the stage for intense competition between fuels and technologies", including because of anticipated overhang of LNG and oil supply.
    • As noted in recent editions of P₂N₀, LNG production capacity is increasing.
      
      The IEA asks Who will ride the wave of new LNG? In exploring the answers to this question, the IEA notes that "Gas importing emerging in developing economies would generally need prices at around USD 3-5/MMBtu to make gas attractive as a large-scale alternative to renewables and coal ... ". For what it is worth, the author agrees with this thesis, at least at the lower end of the USD 3 / 5 MMBtu range. This means that renewables and coal will continue to provide a more affordable pathway for developing economy to develop their electrical energy capacity.
      
      As noted recently, it is likely that oil supply will be greater than demand, and the IEA states that this "new market context may provide some breathing space for fuel-importing countries and regions – such as Europe, and South and Southeast Asia – that have been hit hard by higher prices for fossil fuel and electricity in recent years".
    • Renewable electrical energy capacity development continues, with China leading the way in the deployment of renewable electrical energy capacity. The IEA reminds us that 10,000 GW of renewable electrical energy needs to have been installed by 2030, more than doubling from 4,250 GW. This continues a well-worn theme – more needs to be done to develop renewable electrical energy capacity, to address increased electrification and urbanization in developing countries and to address increased demand for electrical energy in developed countries and developing countries in respect to AI.

Note: This is the author's summary of key themes from WEO24. Links to the Executive Summary and WEO204 allow the reader to access them, and the author recommends both. WEO2024 was accompanied by Energy Technology Perspectives 2024.

• On March 19, 2025, Demand and Supply Measures for the Steel and Cement Transition – The case for international co-ordination. The publication was developed at the request of the Climate Club.
  
  As noted in recent editions of P₂N₀, the cement and concrete and iron and steel are essential to the continued development of the global economies. Just as these industries are essential to continued development, to progress to net-zero GHG emissions, these industries need to be decarbonised.
  
  The publication notes that:
  
  "The steel and cement sectors accounts for 14% of global energy and process-related emissions on a direct basis, making them central to the decarbonisation challenge".
  The Executive Summary of the publication makes the following points:
  
  1. Acceleration of decarbonisation is needed;
  2. Policy settings are needed to establish demand, internationally, for green iron and steel, and green cement and concrete;
  3. Government has a role to play in establishing demand;
  4. Supply side measures are needed, and must work "hand-in-hand" with demand side measures;
  5. Cross-border collaboration would provide benefits; and
  6. A pledge specific to industrial decarbonisation would send an important signal in the context of the development of supply and demand for green iron and steel and green cement and concrete.
  By way of reminder: Edition 27 of P₂N₀ (at pages 6 and 7) covers the key findings of Zenon Research - Decarbonizing steel production – is hydrogen the only lever, including the means of decarbonising iron and steel.
  
  The carbon intensive industrial sector is considering carbon capture and storage (CCS) to capture CO2 arising from the activities to produce iron and steel and to produce cement, the use of renewable electrical energy to provide power, and hydrogen to produce high-heat temperatures.
  
  In addition to iron and steel and cement, the aluminium and refining and petrochemical sectors are positioning to decarbonise their activities and have the same challenges as the iron and steel and cement sectors.

To view the full article click here.

Footnotes

1. Dynamics and Themes:

• Age of electricity: Throughout 2024, one of the key themes that emerged as anticipated is the increase in supply and demand of electrical energy with each of the flagship reports making predictions on increased supply and demand.
  
• Carbon Dioxide Removal (CDR) and Carbon Capture and Storage (CCS): In order to achieve net-zero, CDR and CCS together need to remove and avoid around 15 giga-tonnes of CO2 emissions. In this context, the operationalization of Article 6 of the Paris Agreement and enhanced commitments of government to CCS is welcome.
  
• Critical materials (metals, minerals, and rare earths) (CM3): Alongside the anticipated increase in electrical energy supply and demand sits the need to increase the production and supply of CM3.
  
• Digital and Energy Infrastructure: With the development of Generative AI, there will be an increase for electrical energy for data centres, and more broadly the need to develop energy infrastructure. In addition, the development and augmentation of transmission capacity remains a focus in some areas of the world.
  
• Photovoltaic solar stepped changes: A more difficult market for offshore wind field development emerged during 2024. To counter this, the development of photovoltaic capacity continued globally, in many countries accelerating. A constant theme is the need for government fiscal incentives and funding support (including through concessionary funding, CfDs, and grants) to facilitate decarbonization and energy transition.