Fatih Birol, director of the International Energy Agency: ‘Investing in new oil exploration and gas could be a risky business’

Fatih Birol, 65, became the executive director of the International Energy Agency (IEA), an organization linked to the OECD, in September 2015 — just a month and a half before the Paris Agreement on climate change was signed. Ridding the energy sector of greenhouse gases — which means decarbonizing everything from electricity generation to transportation and industry — is the only way to keep global warming within safe limits. The Paris Agreement set the goal of keeping the global average temperature to well below 2°C above pre-industrial levels, with a view of limiting that rise to 1.5°C. The Earth is already at 1.1ºC above pre-industrial levels.

Since 2015, the IEA has been hardening its discourse, expressing more support to renewables to the detriment of fossil fuels, the main culprits of the climate crisis. Birol was in Madrid this week to take part in an international meeting on energy and climate organized by the IEA and the Spanish government. He spoke to EL PAÍS after giving the closing speech of the meeting, which was focused on the need to triple global renewable power by 2030.

Question. Is it possible to triple renewable energy by 2030?

Answer. It is definitely possible. What we are seeing is that solar and wind are already dominating the game. This year, of all the power plants built in the world, more than 80% is renewable electricity. And this is not coming only from Europe, it is coming from China, India, Latin America, United States. It is a big move. So it is feasible to have a tripling of renewable capacity in the next seven years.

Q. But the problem is in emerging countries, where renewables are not taking off at the same speed.

A. That’s right. Because the cost of capital in those countries are higher than in Europe. The reason is many investors see still some risk for their investment there because of the questions about the rule of law, whether or not they can get their returns back. But this is going to be addressed now by the reforms of the multilateral development banks, such as the World Bank, such as IMF and such as regional banks. They are going to provide some concession of funding in order to de-risk those investments... For example, 40% of the global solar radiation is in Africa. But the amount of solar electricity generated in Africa is half of what is generated in the Netherlands. There is a big gap there. But solar will grow very strongly.

Q. Is it possible to achieve the goal of limiting warming to 1.5ºC without eliminating the use of oil, gas and coal?

A. I think we cannot reach the 1.5ºC target with our current oil, coal and gas consumption. In 2050, there may be some oil still, there may be some gas still, but they should be much less than what we have today. For example, we use 100 million barrels per day of oil. This needs to go to about 24 million barrels per day in 2050 and gas consumption needs to decline as well. We cannot keep oil, gas and coal consumption at the current levels and reach the 1.5ºC target. We have to choose what we want to do.

Q. Is capturing and storing carbon dioxide emissions the solution for the fossil fuel sector?

A. We can use carbon capture and storage in a way, but it will not be a big game changer. If we want a game changer, we need to reduce the oil, gas and coal, but in some instances we can use carbon capture and storage, but this is not a panacea to change the world.

Q. Would putting an end to new oil and gas exploration be a game changer?

A. If we want to reach the 1.5ºC target, which is set in the Paris Agreement and by scientists, we have to reduce the use of oil and gas consumption. If the consumption of oil and gas goes down, we don’t need new oil and gas exploration around the world. Even if we are not on track for the 1.5ºC target, even if there are no new policies to push the climate agenda. With the current growth of solar, wind and electric cars, we see that the global oil, gas and coal consumption will peak before 2030 and slowly decline, although it will not be the large decline needed to move towards the 1.5ºC target. This means that even in the absence of new climate policies, investing in new oil exploration and gas could be a risky business, risky for climate change, but risky also for investors if they want to make a return because demand will not be high.

Q. Renewable energy is growing around the world, but emissions from the energy sector are not decreasing. Why? Where is the problem?

A. We are still seeing the impact of the rebound from the Covid crisis. But in a few years we will see that the impact of that rebound will end. We are going to see that emissions will begin to decrease after reaching their peak. We expect this to happen around 2025.

Q. And then it will plateau?

A. It will depend on the government policies. With the current policies, it will more or less plateau. But if governments implement strong efficiency and renewable energy policies and reduce fossil fuels, then we can see a decrease in emissions. But even without new policies, it will reach a plateau in 2025. Is that still good? It will bring us to a 2.4ºC trajectory, which means a lot of extreme weather events and climate effects.

Q. The IPCC deadline for emissions peak is also 2025. But then emissions need to fall by half in 2030 to meet the 1.5ºC. Is this possible? Do you think that scenario is realistic?

A. It is a narrow chance, but we still have the chance. We don’t have a big chance to do that and if we don’t push clean energy policies such as electric cars, renewables, efficiency, we may well see that we miss this target. If we push those policies, we may see a decline, but halving emissions is a big job. Although we have all the policies and technologies, we have the solar, we have the wind, we have efficiency, we have hydrogen, electric cars... Whether we do it or not, whether governments will push it or not, that is the question. For me, the biggest challenge we have now is the lack of international collaboration and the geopolitical tensions between countries. If this problem did not exist, if there were no geopolitical tensions between countries, it would be much easier. But this geopolitical fragmentation between countries is making it much more difficult.

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