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Opinion

Introducing our Global Net Zero Pledges Scenario

How are the leading countries faring on the path to net zero?

3 minute read

Prakash Sharma

Vice President, Scenarios and Technologies

View Prakash Sharma's full profile

We recently published the inaugural edition of Wood Mackenzie’s Global Net Zero Pledges Case Scenario. Drawing on our subject-matter expertise and proprietary integrated energy modelling, we have analysed 19 major countries and regions and key end-use sectors to assess what it takes to fulfil announced pledges, as well as the implications for commodities and technologies.

Fill in the form for a complimentary synopsis of our report and read on for an outline of our views.

The race for net zero

In the run-up to the COP27 climate conference in Egypt, more than 80 countries announced pledges to reach net zero emissions around mid-century. Most Organisation for Economic Co-operation and Development (OECD) nations aim to reach net zero by 2050, while developing countries plan to get there a decade or two later. China and India aim to reach net zero by 2060 and 2070, respectively.

Energy-related emissions in our pledges case scenario decline 8% from 2019 levels by 2030 and 80% by 2050. Global net zero arrives around 2060, taking cumulative emissions to around 750 billion tonnes (Bt) of CO2. This means the world stays on track to reach 1.7 ˚C warming with 33% probability and 2 ˚C warming with 67% probability.

However, the world falls well short of the most ambitious goals of the Paris Agreement under our pledges case scenario. The remaining carbon budget for a 1.5 ˚C pathway is around 400 Bt CO2 and is likely to be exceeded by the early 2030s. Under our more ambitious Accelerated Energy Transition (AET-1.5) scenario, a pathway to 1.5 ˚C is still plausible and can be achieved with the rapid adoption of hydrogen and carbon capture utilisation and storage (CCUS) technologies and efficiency gains, particularly in China and India.

Here's what we see happening in key sectors.

Power generation

  • Compared with our base case, power demand expands by about 40% under our pledges scenario, with green hydrogen the single largest source of incremental growth by 2050.
  • Around 90% of incremental capacity comes from wind, solar and energy storage. Wind and solar generation are double that of our base case under our pledges scenario.
  • Low-carbon dispatchable generation becomes critical due to higher wind and solar penetration. Markets shift from unabated gas and coal to investing in ammonia co-firing, hydrogen combustion and carbon capture and storage (CCS) to provide flexible generation.

Commodities

  • Oil demand declines to 49 million barrels per day (mb/d) under our pledges scenario. Electrification and the deployment of emerging technologies drive substitution across all sectors, especially in the OECD countries.
  • Bioenergy expands rapidly so the maritime sector can reach its decarbonisation goals. While oil still accounts for the highest share of bunkering under our pledges scenario, bioenergy reaches a 30% share by 2050.
  • OECD gas demand peaks around 2025, almost a decade earlier than our base case, while non-OECD gas demand remains resilient.
  • Under our pledges scenario, global coal demand is 30% lower than in our base case. Unabated coal generation in the power sector sees the largest decline, while CCUS in power and industry supports coal demand.

Transport

  • Under our pledges scenario, new vehicle sales are electric and increase rapidly across both the passenger and commercial sectors.
  • Delivering the electrification of road transport requires a substantial build-out of electric vehicle (EV) charging infrastructure. Charging outlets reach over 750 million units by 2050.
  • Battery demand grows sevenfold under our pledges scenario, driving significant growth in raw materials, despite improvements in battery chemistry.

Emerging technologies

  • Hydrogen demand scales up faster than our base case to tackle hard-to-abate sectors and to provide flexible power generation. The US, China and India are responsible for 60% of low-carbon hydrogen demand under our pledges scenario.
  • Hydrogen production reaches 500 to 630 million tonnes per annum (Mtpa) under our pledges and net-zero scenarios, respectively. Low-cost renewables and power infrastructure underpin green hydrogen, while CCUS and low natural gas prices support blue hydrogen.
  • Pipeline growth in low-carbon hydrogen and project execution accelerate under our pledges scenario. Larger projects deliver economies of scale, supporting market development.
  • An attractive hydrogen sales price and incentives overcome high project costs. In the US, the Inflation Reduction Act helps projects to move forward and other countries may follow a similar policy framework.
  • International trade enables hydrogen adoption. Under our pledges scenario, global trade is around 30 million tonnes higher than in our base case.
  • Carbon removals reach 6 Bt, almost three times higher than our Energy Transition Outlook.

Our Energy Transition Tool allows you to compare scenarios, access our emerging tech research, and look at visualisations on the future of energy.