(www.MaritimeCyprus.com) The energy transition represents a unique challenge for mankind. A journey that will not be linear, marked by great aspirations and many hurdles, from geopolitical tensions to technology disruptions and unforeseeable global economic developments. In this continuously evolving transformation, natural gas and related infrastructure represent a critical element of sustainable resiliency for the global energy system, while new green and low-carbon molecules will play an essential role in achieving a just and technologically neutral transition.
Global Gas Demand Growth and the Path to Reducing Emissions in 2024
Global gas demand continued to grow in 2023, rising by 59 Bcm (1.5%) compared to 2022. This upward trend is projected to persist in 2024, with an additional estimated increase of ~87 Bcm (2.1%). Asia's robust demand remains a key driver of global gas imports, while export growth from North America and the Middle East has been a major factor in global supply expansion. Although global gas markets have stabilized from the extreme volatility and high prices experienced in 2022, they remain vulnerable due to ongoing energy security concerns. As 2023 marked another record year for emissions and coal use, it is crucial to note that switching from coal to natural gas offers a readily available, cost-effective, and immediate way to reduce emissions by about 50%. However, it is essential to pursue this transition alongside continued efforts to expand renewable energy, improve efficiency, and scale up all viable emission-free energy sources.
The Role of Low-CO2 Gas Technologies in Decarbonizing Future Energy Systems
It is essential to highlight the significance of low-CO2 gas technologies such as biomethane, zero- and low-CO2 hydrogen, and carbon capture, utilization, and storage (CCUS). Currently, biomethane production is concentrated in North America and Europe, with emerging markets in China and India. While zero- and low-CO2 hydrogen production remains small, it is projected to grow rapidly at an annual rate of 45% from 2023 to 2030, provided pre-FID projects in the pipeline come to fruition. At present, both biomethane and hydrogen volumes remain limited, with biomethane accounting for roughly 1% of global natural gas supply, and hydrogen not yet having a significant presence in the energy market. Similarly, CO2 capture capacity through CCUS is expected to increase by 42% annually, with 86% of the 2030 pipeline reliant on pre-FID projects.
These technologies are anticipated to play pivotal roles in the decarbonization of energy, offering low-CO2, reliable, and flexible energy solutions for a sustainable, secure, and affordable future energy system.
Ensuring Reliable and Sustainable Energy Amid Rising Global Demand
The need to maintain a steady supply of dense, efficient, flexible, and reliable gaseous energy is becoming increasingly important, as global energy demand continues to grow—not only in developing regions but also in developed ones—despite improvements in energy efficiency and structural declines in some sectors. Emerging global trends, such as the widespread adoption of artificial intelligence (AI) and rising temperatures, will further drive electricity demand from data centers and cooling, respectively, influencing gas demand.
These developments challenge the assumptions of reduced energy demand growth in many institutional scenarios. If global energy demand continues to rise at the pace seen in recent years, it is likely to exceed the 2030 reduction targets set by many nations. Should the demand growth rate observed between 2021-2024 persist, the 2.7% annual increase towards 2030 would significantly outstrip projections, which range from –0.2% to 1.7%.
Even if demand grows at the slower rate of 1.8%, as seen over the past decade, it would still surpass expectations. In this uncertain landscape, sustained investment in gas and its infrastructure, along with accelerating investments in low- and zero-CO2 gas technologies and other clean energy solutions, alongside energy-saving measures, is critical to ensuring a future of reliable, sustainable, and affordable energy.
For more details, click below to download the full Global Gas Report 2024:
Source: IGU
