Fossil fuel demand will peak in 10 years Trillions of dollars in assets may be stranded

According to a new report from carbon tracker Carbon Tracker, the rapid growth of clean technologies is expected to cause fossil fuel demand to peak in the 21st 2020s, which is a huge risk
for investors who are unaware or unwilling to participate in the transition to low-carbon.

A new report released by independent financial think tank Carbon Tracker says emerging economies are pursuing clean energy due to the rapidly falling costs of renewable energy
and battery storage.
At the same time, demand for coal, gas and oil has stagnated, driven by government policies that increase demand for emissions cuts, control climate change and reduce air pollution
.

As a result, Carbon Tracker predicts that solar and wind will offset all growth in fossil fuel energy technologies, i.
e.
global energy demand is expected to grow at a rate of 1% to 1.
5% per year, while solar and wind will grow by 15% to 20%, resulting in fossil fuel demand peaking between 2020 and 2027, most likely in 2023
.

"The 2120s will be the decade of peak fossil fuel demand, as one fortress after another is shaken and overwhelmed by rising waves of regeneration," explains Kingsmill Bond, a new energy strategist at Carbon Tracker and author of the report.

”

According to Carbon Tracker, a key aspect of the energy transition is that emerging markets will account for the bulk of energy demand growth over the next few decades, and they will not choose the same path
that developed countries have chosen.
Renewable energy not only provides local energy security without relying on imports, but also creates long-term environmental concerns and countless opportunities
for employment, economic and technological development at home.

Therefore, from the perspective of this large-scale energy transition, the 21st century can be divided into four separate and identifiable phases: 2000-2020 is the innovation phase; 2020-2030 will be the peak phase; 2030-2050 will be a phase of rapid change; And 2050 and beyond will be the final stage
of fossil fuels.

"Fossil fuel demand has been growing for 200 years but is about to enter a structural decline," Kingsmill Bond said, "and it will be difficult for the industry as a whole to fight this shift, which will inevitably lead to lower prices, increased competition, restructuring, stranded assets and market price
reductions.
" ”

The natural consequence of these projections is therefore to have a significant impact
on investors who are reluctant to participate in the transition to a low-carbon energy sector, or who are simply unaware of the transition.
According to Carbon Tracker, "much of the fossil fuel industry appears to be blind to this risk," with BP, the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency all expecting fossil fuel demand to peak or more
.

Therefore, the impact of this energy transition is expected to be "enormous":

1.
The fossil fuel industry has invested about $25 trillion in infrastructure, and financial markets face systemic risks as they seek to absorb large amounts of stranded assets;

2.
The transition will directly affect those companies that make up up to a quarter of the stock index and debt markets, which will hit the banking, capital goods, transportation and automotive industries;

3.
Fossil fuel exporters will suffer significant losses
.
Russia, for example, is one of
12 countries where fossil fuel revenues account for 10% or more of GDP.