Global energy hogs both hinder and help energy transition challenge: Maguire



(The opinions expressed here are those of the author, a columnist for Reuters.)

By Gavin Maguire

LITTLETON, Colo, Sept 26 (Reuters) - The energy transition away from fossil fuels will ultimately impact all of the nearly 200 recognised nations globally, but a vast majority of current energy use and emissions stems from less than a dozen countries.

Indeed, just 10 countries accounted for a record 64.4% of total world energy use in 2021, nearly 70% of all carbon dioxide (CO2) emissions, and 92% of the total increase in global energy use since 2016, according to data from Enerdata.

Such a concentration of energy use and pollution presents both opportunities and challenges for those looking to track and control both components of the global economy.

On the plus side, the modest number of critical actors means that the resources being deployed to test more efficient and lower-emitting energy sources can be focused on markets where they will have the greatest chance of real-life and large-scale applications.

On the downside, energy consumers use that power and fuel to run thousands of companies and support millions of jobs that in turn ensure the livelihoods of entire populations, and so will resist any retooling that may cause harm to industry or inconvenience to voters.

ENERGY HOGS

The top 10 total energy consumers in 2021 included perennial industrial heavyweights the United States, China and Japan; fast-growing emerging markets India, Brazil, and Russia; established second-tier economies Germany, South Korea and Canada; and a revitalised Iran benefiting from easing international sanctions.

China was by far the largest single energy consumer, taking a 25.1% share.

The United States accounted for an additional 14.6%, meaning the top two consumers alone accounted for close to 40% of all global energy use in 2021. China and the United States also consumed more total energy than the next eight largest consumers combined, underscoring the chasm between those two economies and the rest of the world.

The sheer scale and prominence of both China and the United States means both countries are also emerging leaders in several areas tied to the energy transition and emissions reductions. Together, they are the top manufacturers and exporters of solar panels, wind power components, rechargeable batteries and several other renewable energy technologies.

Both countries have also set aggressive decarbonisation goals that should ensure they cap their collective emissions sooner than many of their current high energy-consuming peers.

UNCLEAN GROWTH

Nonetheless, the momentum for both energy use and emissions is still clearly to the upside in other key economies such as India, Russia, Iran and Brazil, which together more than offset the declines in total energy consumption seen since 2016 in North America, Japan and Germany.

Further, the rapid energy use expansion outside of China and the United States is mainly within countries with a relatively low proportion of renewable energy supply and a high dependence on fossil fuels for power.

Indeed, outside of China, the fastest CO2 emissions growth since 2016 among major economies has come from Russia, India, Iran and Brazil.

Compared to wealthier peers, these countries are often more reliant on low energy costs to ensure their manufacturing-heavy industries remain competitive, and so businesses tend to be slow to adapt technologies or production methods that may lower pollution levels if they come with added costs.

Further, their governments often lack the financial firepower needed to engineer the type of rapid industrial transformations seen elsewhere that are fuelled by subsidies and tax breaks.

That means these economies have the potential to amplify pollution alongside energy use over the coming decades, before eventually reaching a peak in emissions later this century.

The extent of that swell in pollution and energy consumption will be determined in part by how well the likes of China and the United States can wean themselves off high-emitting fuels and demonstrate to other economies the value of going greener and leaner in terms of energy use.

If promising learnings and capabilities are widely shared with smaller peers, then the energy transitions in all economies could be accelerated without the disruptions and cost surges widely feared by so many emerging economies.

But if progress tied to the energy transition starts to slow at the top, then those further down the energy use rankings will likely stick to business as usual, with little regard for the emissions impact.



Top 10 global energy consumers accounted for 92% of world energy
demand rise since 2016 Link
The top 10 total energy consumers accounted for 64.4% of global
energy use in 2021 - their largest ever share Link
Some of the fastest growing energy users have some of the lowest
shares of renewable energy use Link
CO2 emissions from top 10 energy users Link
CO2 emissions from top 10 energy consumers + rest of world Link



Reporting By Gavin Maguire; Editing by Muralikumar
Anantharaman

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