Production Gap Report 2023: Global Fossil Fuel Production Exceeds Climate Targets

Context:

• Recently, the Production Gap Report 2023 was released by Stockholm Environment Institute (SEI), Climate Analytics, E3G, International Institute for Sustainable Development (IISD) and the UN Environment Programme (UNEP).

2023 Production Gap Report: Fossil Fuel Disparity Among Top Producers

• The Production Gap Report was first launched in 2019 to assess governments’ planned production against Paris Agreement temperature goals.
• Production Gap Report Titled: “Phasing down or phasing up? Top fossil fuel producers plan even more extraction despite climate promises” 
• The report assessed the fossil fuel production policies of 20 major producer countries, which account for 82% of global production and 73% of consumption.
  • Australia, Brazil, Canada, China, Colombia, Germany, India, Indonesia, Kazakhstan, Kuwait, Mexico, Nigeria, Norway, Qatar, the Russian Federation, Saudi Arabia, South Africa, the United Arab Emirates (UAE), the US, and the UK.

Global Fossil Fuel Production Threatens Climate Goals: A Critical Analysis by Production Gap Report

• Planned Fossil Fuel Production Exceeds Climate Goals as per Production Gap Report:
  • Countries are planning to produce around 110% more fossil fuels in 2030 than is consistent with limiting global warming to 1.50C.
• Global Coal Production Increase:
  • Near-term increase in coal production, with India and the Russian Federation leading the way, planning significant expansions through 2030.
  • India aims for self-reliance and considers the coal industry of paramount importance for income and employment generation. Around one-fifth of India’s coal demand is met through imports, which exposes the country to price volatility in the international market and loss of foreign exchange reserves.
• Climate Impact of Fossil Fuel Burning:
  • The world has burned enough fossil fuels to raise the concentration of carbon dioxide in the atmosphere from 275 parts per million (ppm) before the industrial revolution to about 420 ppm today. 
  • This increase leads to more heat being trapped, leading to climate change.
• Government Plans Undermine Energy Transition:
  • The report also notes that government plans and projections would lead to an increase in global coal production until 2030 and in global oil and gas production until at least 2050.
  • It shows that, compared with 2020 levels, annual oil and gas production is projected to increase by 27% and 25% by 2030 and by 29% and 41% by 2050, respectively. 
  • On the other hand, annual coal production is projected to increase by 10% between 2020 and 2030, before falling by 41% between 2030 and 2050.
• Lack of Commitment to Production Reduction as analyze by Production Gap Report:
  • Major producer countries have pledged net-zero emissions but have not committed to reducing coal, oil, and gas production in line with limiting warming to 1.5 degrees Celsius.

India’s Climate Roadmap to fulfill Production Gap Report Parameter: NDCs, Coal Dilemma, and Economic Growth Balancing Act – 

• India updated Nationally Determined Contributions submitted to the UNFCCC:
  • To reduce the emissions intensity of its GDP by 45% by 2030 (from the 2005 levels).
  • To achieve about 50% of its cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.
  • To create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030. 
  • These steps would help the country reach its long-term goal of reaching net zero by 2070.

• India’s Stand on Coal and Economic Growth:
  • India argues for a phased ‘down’ rather than a complete phase-out of coal, citing its necessity for economic growth.
  • Coal currently contributes to nearly 70% of India’s electricity generation, playing a crucial role in poverty alleviation.
• Current Coal Production in India:
  • Recent data from the Ministry of Coal indicates a notable increase in India’s coal production, reaching 78.65 million tonnes in October 2023, an 18.59% rise from October 2022.
  • Coal India Limited (CIL) alone has contributed to this increase, with coking coal production expected to reach 140 MT by 2030, primarily for the steel industry.

• Export Ambitions:
  • India aims to be a net thermal coal exporter by 2024–2025.
  • Currently meets one-fifth of coal demand through imports, exposing to international market price volatility.

India’s Strategy for Clean Energy Transition: From COP Pledges to Innovative Solutions

• India’s Climate Pledges:
  • Emissions: Despite low per capita CO2 emissions, India ranks as the third-largest emitter globally, contributing 2.9 gigatons of CO2 equivalent annually.
    • A major portion of these emissions are driven by the six sectors; power, steel, automotive, aviation, cement, and agriculture. 

• • COP27 Pledge: India commits to reducing emissions intensity of its GDP by 45% by 2030, aiming for 50% electric power from non-fossil fuel sources by 2030.
  • COP26 Ambitions: India sets ambitious goals, aiming for 50% decarbonization of energy, 500 GW fossil fuel-free capacity, and net-zero emissions by 2070.
• Energy Storage Technologies for a Sustainable Future:
  • Current Energy Sector Status: India stands 4th globally in renewable energy and 4th in solar and wind power capacity.
  • Transition from Coal: As India phases down coal use, Battery Energy Storage Systems (BESS) with safe lithium iron phosphate (LFP) technology enhance efficient electricity consumption.
  • Role of Advanced Battery Technologies: New flow battery technology using non-flammable electrolytes gains popularity for sustainable energy storage, aligning with the global focus on limiting emissions.
• Carbon Capture Technologies for Net Zero:
  • Reducing CO2 from challenging sectors like power plants, steel, and cement is crucial for industrial carbon intensity reduction.
  • Wide deployment of Carbon Capture, Utilization, and Storage (CCUS) tech is vital for achieving carbon neutrality by 2070.
    • CCUS Functionality: Captures CO2 emissions from power plants or industries, preventing their release into the atmosphere, either reusing or storing underground.
  • Advanced Solvent Carbon Capture (ASCC): 
  • Similarly, ASCC technology is designed to capture carbon dioxide emissions from post-combustion flue gases, which are difficult to treat due to the low CO2 concentration. 
    • In the ASCC process, carbon dioxide is absorbed into an amine solvent and then directed to a stripper where CO2 is separated from the solvent and finally transported to be utilized or stored. 
• Sustainable Aviation Fuel (SAF) and Biofuels: Anticipated demand for air passenger journeys in 2050 exceeds 10 billion, posing a challenge for carbon emissions. Biofuels play a vital role in decarbonizing the global aviation industry.
  • Sustainable Aviation Fuel (SAF): A promising solution replacing traditional jet fuels, increasingly used for propulsion and auxiliary power unit engines.
  • Ethanol-to-Jet Fuel (ETJ) Technology: Enables conversion of corn-based, cellulosic, or sugar-based ethanol into SAF.
    • Jet fuel from ETJ process can minimize GHG emissions by 80% on a total lifecycle basis compared to petroleum-based jet fuels.
  • Biofuel Innovation: According to the International Energy Agency, biofuel use needs to triple to approximately 12% of transportation fuel demand by 2030 for effective emission reduction.
    • Biofuels can be manufactured from agricultural waste like plant-based oils, animal fats, and other waste products.
    • National Policy on Biofuels 2018 emphasizes reducing import dependency, providing better remuneration to farmers, and environmental pollution reduction.
      • The policy earlier envisaged an indicative target of 20% ethanol blending in petrol by the year 2030, however, now the target has been advanced to 2025.
• Hydrogen as a Clean Energy Frontier:
  • National Green Hydrogen Mission: India aims to become a global leader in green hydrogen production and exports, projecting a capacity of 5 Million Metric Tonnes per annum by 2030.
  • Green hydrogen from renewable sources and blue hydrogen produced with carbon capture and storage technologies are seen as alternatives for decarbonization.

Urgent Call for Action: A Managed Phase-Out of Fossil Fuels to Achieve Global Climate Goals

• Call for Managed Phase-Out:
  • The report suggests the need for a managed and equitable phase-out of coal, oil, and gas to benefit every person and address the challenges ahead.
  • The report suggests aiming for a near-total phase-out of coal production and use by 2040 and a combined reduction in oil and gas production and use by three-quarters by 2050 from 2020 levels, at a minimum.
• Transparent Planning for Fossil Fuels: It recommended that governments be more “transparent in their plans, projections, and support for fossil fuel production and how they align with national and international climate goals”.
• Adopting Reduction Targets: Urges governments to adopt clear and measurable reduction targets for both near- and long-term fossil fuel production and use.
  • Countries with greater transition capacity should aim for faster reductions than the global average.

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