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Energy Outlook 2023: Our Insights Into the Energy Transition in 2050

Energy Outlook 2023

Our Insights Into the Energy Transition in 2050

On November 13, 2023, TotalEnergies unveiled its Energy Outlook. This document reflects the Company's determination to contribute to the debate on the issues and challenges surrounding the energy transition. The TotalEnergies Energy Outlook paints a detailed portrait of the Momentum and Rupture scenarios for the global energy system up to 2050 developed by the Company and compares them with a Current Course & Speed scenario in an effort to better assess the impact of the various strategies that will enable the energy transition to be completed by 2050. Faced with the upsurge in the world's population, TotalEnergies is taking action to meet the three major challenges of the energy transition, i.e. ensure access to the affordable energy necessary for human development, ensure energy security in every country, and decarbonize energy to limit the effects in terms of greenhouse gases.

The energy transition has started, but differs across countries

Global indicators over the last 20 years reveal that primary energy demand and emissions from fossil fuel combustion are growing less rapidly than the gross domestic product (GDP). While global GDP grew by an average of 3.3% per year over the 2000-2021 period, CO2 emissions increased by 1.7% per year, and total primary energy demand climbed by 1.8% per year. This decoupling of energy demand from GDP growth has been seen since the early 2000s for oil demand, which grew at the same pace as the population until 2019, and since 2015 for coal. At the same time, renewable energy supplies have increased by an average of 2.6% per year, thereby meeting 40% of the growth in primary energy demand over the last five years.

There are still major disparities when it comes to the energy transition. TotalEnergies makes a distinction between three geographical areas:

  • NZ50 countries: the 40 countries (mainly from the OECD) that have committed to achieving net carbon neutrality by 2050.
  • China, because the trend in its energy demand is now closer to NZ50 countries.
  • The Global South, comprising countries from the rest of the world (except for China), which aspire to higher living standards and therefore access to energy.

At a time when energy needs in the Global South are rising sharply against the backdrop of surging population growth, the need to achieve climate justice requires support for the energy transition in these countries, by financing the investments needed to develop low-carbon energies and organizing technology transfers and training.

World divided into three blocks: Global South, China and NZ50

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How will the world evolve over the next 30 years? TotalEnergies' energy scenarios for 2050

By 2050, the entire growth in the world's population will come from the Global South. The economies of these countries will ultimately outgrow those of NZ50 countries and China combined. Energy demand in the Global South would increase by x1.7, representing a rise of approximately 2% per year. The Global South is expected to account for approximately 60% of the total energy demand by 2050, which demonstrates the importance of supporting these countries with their energy transition. TotalEnergies is developing three scenarios for 2050.

Current Course & Speed

Current Course & Speed – an energy system transformation scenario based on current trends:    

  • NZ50 countries and China fail to reach their 2050/2060 objectives, and energy efficiency progresses far too slowly.

  • Demographic growth in the Global South continues to rise, without developing low-carbon energy.

  • Fossil fuels meet 70% of primary energy demand.

This scenario forecasts a 0.7%/year increase in total primary energy demand. It is not sustainable, since it generates too many emissions, and the temperature increase in 2100 is greater than 3°C1.

1 In relation to pre-industrial levels, by comparing the energy-related CO2 emission pathways with the IPCC AR6 scenarios, at P66

Momentum

Momentum – a scenario where NZ50 countries and China step up their efforts to achieve their objectives, but with limited support to the Global South:

  • NZ50 countries exit coal. China significantly reduces its usage, and electrification makes considerable progress.

  • In the Global South, low-carbon energies meet around half of the growth in energy demand.

  • In all countries, natural gas is used as a transition energy.

This scenario forecasts a 0.3%/year increase in total primary energy demand. It shows that decarbonizing NZ50 countries and China is necessary, but not sufficient to comply with the Paris Agreement, since the temperature increase in 2100 is approximately 2.1-2.2°C1.

1 In relation to pre-industrial levels, by comparing the energy-related CO2 emission pathways with the IPCC AR6 scenarios, at P66

Rupture

Rupture – a scenario where the Global South is included in the race to Net Zero:

  • Energy efficiency grows sharply at 2.7%/year between 2021 and 2050.

  • Global cooperation puts the Global South on the road to a strong energy transition: growth in energy demand is mainly met using low-carbon energies with high energy efficiency gains.

  • Gas, oil and coal only meet 40% of the world's primary energy demand in 2050.

This scenario forecasts a 0.1%/year increase in total primary energy demand. It shows that compliance with the Paris Agreement requires support from OECD countries for the Global South. The temperature increase in 2100 is expected to be around 1.7-1.8°C1.

1 In relation to pre-industrial levels, by comparing the energy-related CO2 emission pathways with the IPCC AR6 scenarios, at P66

    Paris Agreement: A wide range of issues

    To comply with the Paris Agreement, consideration must be given to the specific challenges facing each bloc.

    For NZ50 countries and China, it is vitally important to contain and change demand through energy efficiency, the deployment of new technologies and changes in behaviour. Efforts must be made to accelerate the construction of a low-carbon energy system that is less dependent on fossil fuels, while maintaining the current energy system until demand adjusts. The gains generated by all these actions would help achieve a 22% reduction in primary energy demand in NZ50 countries by 2050, according to the Rupture scenario. This scenario shows that demand in China will fall by 9%.

    The main challenge facing the Global South is satisfying fast-growing demand while replacing traditional biomass with modern energies and increasing energy efficiency using technologies from advanced countries. The Rupture scenario shows growth in primary energy demand of around 29%, but a share of carbon-free energies that would reach 54%. The Current Course & Speed scenario would lead to an increase in demand of 75%.

    In addition, deploying carbon capture and storage solutions is key to supporting the transformation of the energy mix and staying well below the 2°C target. The developments described above in the Rupture scenario should enable CO2 emissions to be halved in 2050 compared to 2021. In this scenario, 6 Gt of CO2 could be captured and then stored or transformed into a stable material. Finally, reforestation would be essential to capture residual CO2.

    As such, global CO2 storage projects continue to grow massively, particularly in NZ50 countries, spurred on by favourable regulations. With its goal of developing a CO2 storage capacity of more than 10 million tons per year by 2030, TotalEnergies is investing in this sector to achieve carbon neutrality, together with society. To reach this ambition, the Company is relying on projects that are mainly located in the North Sea, where it has developed a CO2 transport and storage solution as a service to its customers.

    Infographics « Primary Energy Demand » - see detailed description hereafter

    Comparative diagrams of the evolution of primary energy demand in the different blocks between 2021 and 2050 in the Rupture scenario.

    Primary energy demand in the NZ50 block:

    • is met by 22% decarbonated energies and 78% fossil fuels in 2021
    • would be met by 62% low-carbon energies and 38% fossil fuels in 2050, for a total reduction of 22%.

    Primary energy demand in China:

    • is met by 13% low-carbon energies and 87% fossil fuels in 2021
    • would be met by 69% low-carbon energies and 31% fossil fuels in 2050, for a total reduction of 9%.

    Primary energy demand in the Global South block:

    • is met by 12% low-carbon energies, 10% traditional biomass and 78% fossil fuels in 2021
    • would be met by 54% low-carbon energies, 2% traditional biomass and 44% fossil fuels in 2050, for a total increase of 29%.

    The Paris Agreement requires primary energy demand in the NZ50 and China blocks to be contained and modified, while at the same time satisfying growth in demand in the Global South through decarbonised energies.

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    Accelerate the energy transition

    The Current Course & Speed scenario, which predicts a temperature increase of more than 3°C by 2100, shows that the current pace is unsustainable for achieving the energy transition objectives and that the collective challenge is to move as far away as possible from this scenario while guaranteeing economic development, particularly in the Global South.

    Reduce greenhouse gas emissions: A major challenge and opportunities

    A number of high-impact actions could quickly curb greenhouse gas (GHG) emissions. While global anthropogenic GHG emissions reached 58 Gt CO2e2 in 2021, eliminating coal from the electricity system and methane emissions from fossil fuels production would help avoid ~10 Gt CO2 and ~4 Gt CO2e respectively. Similarly, decarbonizing transport, particularly the road sector, would result in eliminating approximately 6 Gt CO2.

    2 CO2 equivalent

    Infographics « Global anthropogenic GHG emissions 2021 » - see detailed description hereafter

    Global anthropogenic GHG emissions in 2021 and global CO2 emissions from fossil fuel combustion in 2021.

    Of the 58Gt CO2e of greenhouse gases resulting from human activity in 2021, 33Gt correspond to CO2 emissions from energy combustion. The remainder comes from:

    • CO2 emissions from industrial processes
    • CO2 from land use
    • methane from fossil fuels
    • other methane and GHG emissions

    Of the 33Gt of CO2 from fossil fuel combustion in 2021 :

    • 14Gt from the electricity sector, made up of 22% gas, 4% oil and 74% coal
    • 8Gt from the transport sector, 98% oil and 2% gas
    • 5Gt from industry, 52% coal, 30% gas and 12% oil
    • 3Gt from the building sector and 3Gt from other energy uses
    • 1Gt comes from the energy sector

    Of the 58 GtCO2e of anthropogenic GHG emissions in 2021, 33 Gt came from energy combustion, including 14 Gt from electricity generation, 8 Gt from transport and 5 Gt from industry.

    Invest in renewables and natural gas to replace coal

    Coal is still too prominent in the electricity generation mix of many countries in the different blocks. It accounts for 28% of electricity production in Global South countries, fueling their demographic and economic growth, as well as 21% in NZ50 countries and 63% in China. Therefore, it would appear to be a priority for NZ50 countries to massively eliminate coal from their electricity generation mix and support solutions so that the Global South can follow a different path from China in the 2000s. Nevertheless, faced with increasing primary energy demand, there is no way to "unplug" the current energy system as long as a carbon-free energy system is not sufficiently developed to meet global demand.

    The development of renewable energies is a prerequisite for moving the energy transition forward. The growth in renewables could cause emissions per MWh of electricity to fall by 76% between 2021 and 2050 in the Momentum scenario and by 96% in the Rupture scenario. TotalEnergies is focused on its objective of producing more than 100 TWh/year of electricity by 2030.

    Similarly, natural gas is key to driving the energy transition. It plays a major role in electricity generation through its flexibility and its ability to meet fast-growing demand. It emits half the greenhouse gas emissions as coal, which it can replace in electricity generation. Today, TotalEnergies is primarily focusing on liquefied natural gas (LNG), which enables gas to be transported anywhere in the world. The Company is the world's third largest LNG operator.

    Reduce methane emissions

    Energy is the second largest source of anthropogenic methane emissions, just behind agriculture. Many technologies have been developed to eliminate methane emissions in oil and gas production. It is essential for all the players in the chain, whether companies or governments, to take concerted action to tackle methane emissions, as highlighted by the COP 26 conference in Glasgow and the commitment by 105 countries to reduce them by 30% by 2030.

    TotalEnergies is committed to reducing its methane emissions by 80% between now and 2030. This global commitment on methane should have a positive and rapid impact on global warming, which has been estimated at - 0.2°C by 2050 by the United Nations Environment Programme.

    Electrify road transport

    Road transport accounts for approximately 80% of GHG emissions from the global transport industry. Electrification is the preferred solution for accelerating the energy transition, provided that low-carbon electricity is used. However, infrastructure investments are required, such as charge points and the actual networks.

    The Momentum scenario shows that the efficiency gains from electrifying vehicle fleets (particularly in China, the United States and Europe) would drive down the sector's energy demand by 2050, even though demand for mobility would rise sharply. By 2050, electrification of light vehicles would divide emissions by two in the Momentum scenario (from 4 to 1.7 Gt CO2) and by four in the Rupture scenario (from 4 to 0.9 Gt CO2).

    As a pioneer in developing these technologies, TotalEnergies provides on-the-ground solutions to the challenge of electric mobility and operates over 53,000 charge points worldwide in 2023. From producing renewable electricity through to operating the charging service, the Company is present across the electric mobility value chain.

      Transform energy demand

      Consume less and better in industry and in the residential and commercial sectors

      There are many ways to accelerate the energy transition by consuming less and better in industry and in the residential and commercial sectors. They must respond to one or other of these challenges: decarbonize the energy mix and change behaviour/improve energy efficiency.

      Some of the levers featured in the Rupture scenario include:

      Challenges of Industrial demands - Rupture scenario
      Industrial demandDecarbonization of the energy mixBehaviour change/energy efficiency
      Electrify production processes✓✓
      Use gas instead of coal, which halves emissions✓ 
      Capture CO2 or use low-carbon hydrogen to gradually reduce these residual emissions✓ 
      Challenges of Residential and commercial demands - Rupture scenario
      Residential and commercial demandDecarbonization of the energy mixBehaviour change/energy efficiency
      Replace traditional biomass (~85% of bioenergy in 2021) with modern energies in the Global South✓✓
      Electrify as much as possible✓✓
      Improve energy efficiency (e.g. building insulation) ✓
      Change consumption behaviour (e.g. target temperature level) ✓

      Consume less and better in transport

      While transport as a whole (light vehicles, high-duty vehicles, aviation and shipping) accounted for 26% of final energy demand in 2021, the Rupture scenario plans to contain energy demand in this sector by acting on the two strategies of decarbonizing the energy mix and changing behaviour/improving energy efficiency.

      • Light vehicles: develop public transport and replace internal combustion vehicles with electric vehicles, while investing in a network of charge points.
      • High-duty vehicles: strive to decarbonize vehicle fleets and invest in the charging network, while continuing to innovate, particularly in batteries.
      • Aviation: massively increase sustainable aviation fuel production, invest massively in e-fuels and increase aircraft energy efficiency.
      • Shipping: develop a diversified mix of low-carbon marine fuels to replace oil, invest in hydrogen-derived fuels and increase energy efficiency.

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      TotalEnergies Energy Outlook 2023

      Challenges & Opportunities of the energy transition

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      The essentials in less than three minutes with Thomas-Olivier Leautier, Chief Economist at TotalEnergies

      We want to share with everybody what we know about energy and what needs to be done and what's going well and not so well.

      What is the “Energy Outlook”?

      The Energy Outlook is a set of trajectory for all of the energies up until 2050.

      And we do that for two reasons. One is to frame our strategy and second, we want to share that with the public, because we want to share with everybody what we know about energy and what needs to be done and what's going well and not so well.

      What are the three most important take aways from this year’s Energy Outlook?

      There are really three things that we'd like you to remember. Number one, there's good news and bad news on the energy transition.

      The good news is that it has started, when you look at the GDP growth, it's much higher than the growth in energy demand. The second good piece of news is we have the powerful low-carbon technology. We have electric vehicles for mobility and we have renewables for electricity generation. The bad news is that is proceeding too slowly. Fossil fuels still represent about 80% of our energy demand. That's about the same as it did in 2000. So that's moving too slow. And if we don't accelerate, we will not be able to remain well below as per the Paris Agreement.

      So the second big learning is that when we think about the energy transition, we have to understand that there are different countries and really different circumstances.

      And the third big learning is there are three things we can do quickly to reduce CO2 emissions. One is increase EV penetration. Second is get rid of coal in electricity generation. The third thing, of course, is methane emissions. Methane is exceedingly powerful as a greenhouse gas. We know how to stop it. We know how to reduce it in oil, gas and coal project production. So we need to get that pronto.

      What are TotalEnergies’ priorities when it comes to accelerating the energy transition?

      There are two things we are doing. The first one is, as I said, we're working on methane. And when you look at our objective by 2030, we'll further reduce our methane emissions. We also want to reduce CO2 emissions from our own production. So we want to take care of our scope one and two and get to best in class in that level. The other thing we're doing is that we are growing renewable and electricity generation. Because of the work we do in the TotalEnergies Outlook, we are convinced that electricity, clean electricity is the future of energy and we are growing our energy business. We launched this year our Integrated Power business unit. We have committed about 4 billion of capital expenditure every year to grow clean electricity because that's where we think we can make a difference.