A balanced energy future
A realistic approach is needed to meet rising energy demands and climate challenges, with investment in both renewables and hydrocarbons to ensure energy security for all
The Organization of the Petroleum Exporting Countries fully supports Brazil’s G20 presidency. The country is a valued participant in the Charter of Cooperation (signed by OPEC and non-OPEC oil-producing countries in 2019) and demonstrates that it is possible to be a leader in renewables while producing the oil the world needs now and will need long into the future.
Brazil generated 89% of its electricity from renewable sources in 2023, leading the way in the G20. It is also South America’s largest oil producer. OPEC’s 2024 World Oil Outlook sees Brazil’s liquid output rising to 5.1 million barrels per day by 2029.
This aligns with wider global trends that saw demand for both renewables and oil rise significantly in 2023. It underscores the fact that calls to stop investing in new oil projects contradict global energy realities, especially given expected increases in population, urbanisation, the middle class and energy demand.
The global population is set to reach 9.7 billion by 2050, up from just over 8 billion in 2023. Over the next six years, another half a billion people will likely move into cities around the world. To put this in context, this urbanisation drive will require the addition of approximately 74 cities the size of Rio de Janeiro.
Furthermore, although the Brookings Institution expects the fifth billionth person to join the middle class before 2030 – up from over four billion today – billions are already playing energy catch-up. All too many continue to lack access to modern energy services such as basic lighting and clean cooking options, and have never been on a plane
or owned a car.
OPEC estimates a 24% rise in global primary energy demand in the period to 2050. This considerable growth, coupled with the fact that hydrocarbons currently supply over 80% of global energy, underlines the reality that they will be needed at scale for decades to come. Indeed, the past has always been about adding new energy sources rather than substituting one for another.
In this regard, OPEC welcomes all the progress made in renewables and electric vehicles. However, the reality today after trillions of dollars in investment is that solar and wind make up only around 4% of global energy, while EVs have a global penetration rate of between 2% and 3%. Moreover, the development of renewables and EVs requires oil-related products, adding to oil demand.
Prudent energy policymaking to meet the world’s energy and climate challenge should be steeped in real-world data that prioritises energy security, utilises all energies, delivers energy affordability and reduces emissions – all core areas of focus for the Charter of Cooperation.
A dual strategy
Thus, like Brazil, OPEC members are investing in renewables, and in oil, to ensure that consumer needs are met. At the same time, they are also working hard to improve efficiencies, implement low-emissions solutions and mobilise cleaner technologies such as carbon-capture utilisation and storage, clean hydrogen technologies, direct air capture and carbon dioxide removal, all within the concept of the circular carbon economy.
Against this backdrop, the G20 can embody the motto of this year’s summit – ‘Building a Just World and a Sustainable Planet’ – by recognising the totality of formulations in the outcome of the first Global Stocktake from the United Nations climate change conference in Dubai in 2023. This includes the need to acknowledge “different national circumstances, pathways and approaches” and transition “in a just, orderly and equitable manner,” a key hallmark of Brazil’s G20 presidency.
Every country has its own energy pathway to a sustainable energy future, in keeping with the principle of common but differentiated responsibilities, and all people deserve comparable standards of living, electricity and clean cooking.
From this perspective, the G20 can contribute to maintaining energy security, fostering human well-being and reducing emissions by helping to ensure that the financing and technology development and transfer promised in the Paris Agreement is delivered. It can also help support investment-friendly climates for all energies and all technologies in the developing world and beyond.
We need to invest adequately – today, tomorrow and for many decades into the future – in a manner that reflects realistic assumptions about what each energy source can offer, and given the need to reduce emissions.
The right investment is paramount. The energy futures of more than 8 billion people, soon to be 9.7 billion, depend on it.
