North American net energy-related emissions to fall 20% by 2030, according to Wood Mackenzie

According to a recent report from Wood Mackenzie, 2030 net energy-related emissions from the North American power sector are set to fall by 20% compared to 2024 levels.

The "Energy Transition Outlook 2024-25: Americas" report shows that in Wood Mackenzie’s base case outlook, main drivers of this activity in North America will be lower emissions from the power sector, which are set to decline 24% by 2030, and the acceleration of transport electrification.

However, rising trade tariffs, infrastructure delays, and policy uncertainty for emerging technologies could slow down North America’s energy transition. In Wood Mackenzie’s delayed transition scenario, emissions are 11% higher than its base case in 2030. ​

“President Trump has stated that he will challenge policy support for low-carbon energy,” said David Brown, director, Energy Transition Research at Wood Mackenzie. “However, roadblocks include Republican support for the IRA, the competitive economics of renewable power, and private-sector net zero targets. All eyes will be on the US Senate’s approach to the IRA during US budget discussions this year.”

Key findings on North America from the report include:

• Renewables and battery storage are set to account for 80% of new power generation capacity through 2050.
• Electrification and low-carbon hydrogen accelerate the phase-out of oil and natural gas​.
• Oil demand declines by 8 Mb/d in the base case due to electrification of transport (2024-2050). In a delayed transition scenario, higher-cost sources of upstream supply will need to come online.
• Blue hydrogen and power generation provide demand resiliency for natural gas.
• In the base case, LNG exports exceed 410 bcm by 2050 driven by project expansions from Cheniere, Venture Global, Sempra, LNG Canada and NextDecade.
• Coal demand falls across all outlooks, with unabated thermal coal demand in the power sector falls by 97% in the base case between 2024 and 2050. ​ ​

Policy
The report highlights the impact of key policies such as the Inflation Reduction Act (IRA) in the US and Canada's net zero goal in driving decarbonization efforts. However, policy uncertainty associated with carbon pricing, low-carbon hydrogen, and infrastructure permitting are leading to a slowdown in investment especially through 2030 in Wood Mackenzie’s base case outlook.

“Mexico has decarbonisation goals, but the government’s main priority is affordable access to energy and maximizing revenue from oil production,” said Gerardo Bocard, Research Associate for Power and Renewables at Wood Mackenzie. “Recent policy announcements from Mexico’s President Sheinbaum will constrain investment across all energy sources.”

Emerging technologies
Innovation and emerging technologies will play a key role in North American decarbonization strategies. Advanced nuclear design is growing in popularity, where the US and Canada are leaders in research and go-to-market strategies.

“The leading nuclear small modular reactor (SMR) companies such as NuScale, TerraPower, and X-Energy are based in the US. Canada is planning to invest in four GE-Hitachi nuclear SMRs and has one of the most advanced SMR development pipelines globally,” said Brown. “We expect North America SMR capacity to reach 19 GW by 2050.”​

Unlocking net zero​
The report also notes the lack of progress on low-carbon infrastructure as one of the largest roadblocks for decarbonisation efforts. In the US, the pipeline for renewable power projects waiting for grid connections has exceeds 1.5 GW.

“With Republican majorities in Congress, the US under a second Trump administration has the best chance in decades to pass infrastructure reform,” said Brown. “In addition to permitting reform, policies that incentivize cost-sharing, hybrid wind, solar and energy storage portfolios need to expand to put the region on a net zero pathway.”