Electric vehicle (EV) sales set to hit an all-time high in 2022, IEA says

Tesla electric cars photographed in Germany on March 21, 2022. According to the International Energy Agency, electric vehicle sales are on course to hit an “all-time high” this year.

Sean Gallup | Getty Images News | Getty Images

Electric vehicle sales are on course to hit an all-time high this year, but more work is needed in other sectors to put the planet on course for net-zero emissions by 2050, according to the International Energy Agency.

In an announcement accompanying its Tracking Clean Energy Progress update, the IEA said there had been “encouraging signs of progress across a number of sectors” but cautioned that “stronger efforts” were required to put the world “on track to reach net zero emissions” by the middle of this century.

The TCEP, which is published yearly, looked at 55 parts of the energy system. Focusing on 2021, it analyzed these components’ progression when it came to hitting “key medium-term milestones by the end of this decade,” as laid out in the Paris-based organization’s net-zero pathway.

On the EV front, the IEA said global sales had doubled in 2021 to represent nearly 9% of the car market. Looking forward, 2022 was “expected to see another all-time high for electric vehicle sales, lifting them to 13% of total light duty vehicle sales globally.”

The IEA has previously stated that electric vehicle sales hit 6.6 million in 2021. In the first quarter of 2022, EV sales came to 2 million, a 75% increase compared to the first three months of 2021.

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The IEA said both EVs and lighting — where more than 50% of the worldwide market is now using LED tech — were “fully on track for their 2030 milestones” in its net-zero by 2050 scenario.

Despite the outlook for EVs, the IEA separately noted that they were “not yet a global phenomenon. Sales in developing and emerging countries have been slow due to higher purchase costs and a lack of charging infrastructure availability.”

Overall, the rest of the picture is a more challenging one. The IEA noted that 23 areas were “not on track” with a further 30 deemed as needing more effort.

“Areas not on track include improving the energy efficiency of building designs, developing clean and efficient district heating, phasing out coal-fired power generation, eliminating methane flaring, shifting aviation and shipping to cleaner fuels, and making cement, chemical and steel production cleaner,” the IEA said.

The shadow of 2015’s Paris Agreement looms large over the IEA’s report. Described by the United Nations as a “legally binding international treaty on climate change,” the accord aims to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.”

Cutting human-made carbon dioxide emissions to net-zero by 2050 is seen as crucial when it comes to meeting the 1.5 degrees Celsius target.

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In a statement issued Thursday the IEA’s executive director, Fatih Birol, appeared cautiously optimistic. “There are more signs than ever that the new global energy economy is advancing strongly,” he said.

“This reaffirms my belief that today’s global energy crisis can be a turning point towards a cleaner, more affordable and more secure energy system,” he added.

“But this new IEA analysis shows the need for greater and sustained efforts across a range of technologies and sectors to ensure the world can meet its energy and climate goals.”

The IEA’s report comes at a time when the debate and discussion about climate goals and the future of energy has become increasingly fierce.

This week, the U.N. secretary general said developed economies should impose an extra tax on the profits of fossil fuel firms, with the funds diverted to countries affected by climate change and households struggling with the cost-of-living crisis.

In a wide-ranging address to the U.N. General Assembly in New York, Antonio Guterres described the fossil fuel industry as “feasting on hundreds of billions of dollars in subsidies and windfall profits while households’ budgets shrink and our planet burns.”

Climate change may bring back wind as the power source for ocean ships

Airseas, the maritime unit of France’s Airbus, has developed a gigantic, automated kite called Seawing, which essentially tows a ship.


The shipping industry accounts for nearly 3% of the world’s total greenhouse gas emissions, producing as much manmade carbon dioxide as all the coal-fired power plants in the U.S. combined. Still, it’s a relatively small output within the overall transportation sector, which is responsible for 37% of annual global greenhouse gases.

Yet as international trade continues to grow and heavily rely on oceangoing vessels to move cargo — they currently carry more than 80% of it — some scientists warn that by 2050 shipping could account for 17% of greenhouse gases.

That’s why, after years of lackluster efforts to decarbonize, the industry’s regulatory body is getting on board. In 2018, the International Maritime Organization, or IMO, a London-based United Nations agency comprising 175 member countries — many with delegates directly tied to businesses resistant to curbing emissions — adopted a strategy to reduce greenhouse gases by 50% by 2050 compared to the 2008 level.

Critics say that goal is too little and too late, insisting the IMO reset its target to 100% decarbonization by mid-century, or preferably sooner.

“The IMO has been rather late to the party, in terms of developing climate measures and coming up with a strategy,” said Lucy Gilliam, shipping policy officer at Seas at Risk and a board member of the Clean Shipping Coalition, both environmental NGOs. She cited the fact that international shipping is not included in the Paris climate accord. Plus, a recent study found that only 33 out of the 94 largest shipping companies have a clearly expressed policy to achieve net-zero emissions by 2050 and/or have committed to the IMO’s goal.

The simplest green shipping solutions

Nonetheless, the private sector is undertaking some initiatives to lessen its climate impact. The simplest solution would be for ships to simply slow down, thus using less carbon-emitting fuel. Shipbuilders are also experimenting with hulls coated with air bubbles to reduce drag, as well as sleeker bows, more efficient engines, propellers and thrusters, and AI-assisted navigation systems.

Meanwhile, the industry is beginning to establish green corridors, or specific shipping routes and ports that support zero-emission solutions and policies. The financial world is joining the decarbonization movement as well, with 29 institutions signing onto the Poseidon Principles, an agreement to consider efforts to cut greenhouse gas emissions when lending to shipping companies. The signatories represent more than $185 billion in loans to international shipping — nearly half of the global ship finance portfolio.

But with a global supply chain designed for speedy deliveries, the big breakthrough bets are being made on the development of low-emission or zero-emission fuels — including green methanol, hydrogen, liquid natural gas (LNG) and ammonia — to reduce or replace the molasses-thick, noxious bunker fuel that feeds most ships’ massive diesel engines.

These efforts include electric propulsion, several wind-power technologies and nuclear energy, which has driven naval vessels since the mid-1950s and is getting some attention as it generates zero emissions, though safety and security concerns are major impediments.

Here’s an overview of the biggest bets being placed on low-carbon and no-carbon breakthroughs in ocean shipping.

Green methanol

An artist’s rendering of a Maersk 16,000-TEU container ship that will run on green methanol.

A.P. Moller-Maersk

Most of the methanol produced today is derived from fossil fuels, but Maersk, CMA CGM and other leading shipping companies are testing two different green, carbon-neutral versions. One is made from solid and liquid biomass extracted from agricultural and forest residues and farming and poultry waste. The other is e-methanol, made by combining CO2 with hydrogen produced from water using renewable electricity. Both are liquids that can be safely stored in non-pressurized tanks at ambient temperatures. Although more expensive than bunker fuel and in limited supply, green methanol can be mixed with bunker in dual-fuel engines to effectively lower carbon emissions.

Liquid hydrogen is another fuel option, often touted because it produces almost no carbon emissions when combusted. Yet about 95% of hydrogen is produced by reforming natural gas or other fossil fuels. It can be made renewably, however, by splitting water using energy from solar, wind, nuclear and hydro power. Green hydrogen can be used in a ship’s internal combustion engine or in fuel cells that generate emission-free electricity. And it may become a cheaper and more attractive alternative due to production tax credits included in the Inflation Reduction Act.

The Washington, D.C.-based International Council on Clean Transportation conducted a study in 2020 on the potential of using renewable hydrogen fuel cells to power container ships servicing the busy corridor between China and the San Pedro Bay near Los Angeles. “Without making any other changes to the vessels, around 43% of the voyages made in 2015 could be made with that technology,” said Xiaoli Mao, a senior marine researcher at the nonprofit organization. “And with minor adjustments to ship design or adding one more refueling stop, 99% could be realized.”

LNG as an alternative fuel source

LNG tops the list of alternative fuels currently used in commercial ships, including some large container vessels, according to Clarksons Research, a shipping analytics firm based in London. Although less than 5% of the current cargo fleet of around 55,000 ships can run on lower-emission fuels, 38% of new builds will have the option, up from 28% a year ago and 12% five years ago. LNG will power nearly a third (741) of those new vessels, while 24 will run on methanol and six on hydrogen.

The knock on LNG for shipping is it’s still a fossil fuel that emits methane and requires considerable capital investment for retrofitting existing engines and fuel tanks. What’s more, it would extend the use of carbon-based fuels for at least another 20 years, which is a typical lifespan for large ships.

Green ammonia

Electric robo-ships

Mitsubishi’s designers are also pioneering electric-powered ships with a vessel called Roboship, which will be built by Honda Heavy Industries and launched next year. The 550-ton ship will replace a conventional diesel engine with a hybrid-electric system, including storage batteries, propellers, motors, switchboards and generators. The digital platform used to control the electric propulsion equipment was developed by e5 Lab, a Tokyo startup promoting electric propulsion and digitization of ships.

e5 is collaborating with another Japanese shipbuilder, Asahi Tanker, to build a pair of all-electric, zero-emissions tankers, powered by large-capacity lithium-ion batteries. The workload of the bunker vessels’ crews will be lightened with automated equipment and digital tools. The first model delivered marine fuel to ships in Tokyo Bay in April, with the second scheduled to begin operating next year.

As with electric cars, travel range and battery charging are issues with e-ships, so they’re being designed for short, local voyages. Electrified ferries, pilot boats and cruise ships are showing up in ports and harbors in Japan, Sweden and Denmark.

The Yara Birkeland, billed as the first fully electric and autonomous container vessel, began transporting small loads of fertilizer in Norway last spring. During its initial two years, the ship will operate with a full crew while gradually transitioning toward full autonomy, including unmanned navigation, loading, unloading and mooring. Electrifying larger TEU-capacity container ships capable of traversing longer regional routes would require lower-cost battery storage and expanding on-shore charging infrastructure.

The return of wind-powered cargo ships

The Flettner rotor system used by shipping industry wind power company Anemoia, was invented by German engineer Anton Flettner in the 1920s. It features smokestack-like cylinders mounted on a ship’s deck that rapidly rotate with the wind, generating thrust.


A ship outfitted with WindWings, solid sails designed by BAR Technologies. Cargill reportedly has plans to charter at least 20 ships using the technology in coming years.

BAR Technologies

Airseas, the maritime unit of France’s Airbus, has developed a gigantic, automated kite called Seawing, which essentially tows a ship. The wind-assist technology, Airseas claims, can reduce fuel consumption by an average of 20%. Another French company, Michelin, is testing its inflatable, retractable, automated wing sail mobility prototype on a ferry running between the U.K. and Spain.

Despite its embrace of these various decarbonization projects, the maritime industry will have a tough time weaning itself off fossil fuels. Indeed, Saudi Arabia, the world’s largest oil exporter, is financing some of the IMO’s green shipping efforts. But as Amazon, Ikea, Unilever and other major movers of cargo seek ways to meet their net-zero goals, shipping is a prime target.

“If they want to reduce their emissions,” said Maersk’s Kindberg, “they need us to reduce ours.”

The future of waste-to-energy technology

We produce over 2 billion tons of waste per year, a number that’s expected to grow by 70% by 2050. We’ve long sought ways to turn all this waste into energy, but this has usually meant incineration – that is, burning our trash – a method that many environmentalists say is far too polluting. 

A better solution may lie in gasification, an old technology that advocates are trying to repurpose as a way to deal with our waste. Gasification companies don’t burn trash, instead they turn into a synthetic gas, in a process they say is both economical and eco-friendly.

This synthetic gas can then be converted into a wide variety of end products like electricity, diesel fuel, hydrogen fuel, or ethanol, depending on whats most valuable in any given market. 

While in the past, gasification companies have struggled to scale-up and meet their energy production targets, now companies like Sierra Energy, Enerkem and Plasco say they’re ready to commercialize and expand.

The rise of solar power

Elon Musk may have promised the world Tesla solar roof tiles in 2016, but turns out the solar industry may not need the upgrade.

The industry has been growing exponentially thanks to plain old solar panels. You can see the evidence both on people’s rooftops and in the desert, where utility-scale solar plants are increasingly popping up. Here in the U.S., of all new power capacity added to the grid in 2018, about 30% was from solar.

But the picture is not all rosy. Solar power is intermittent. The sun isn’t always shining, and the price of storage solutions like lithium ion batteries is still relatively high.

These are real problems that the industry needs to tackle if solar is going to reach its potential. However, if the recent past is any indication, solar power is going to help lead the transition to a carbon-free future, and it might do it faster than we all expected. Watch the video to learn more.

IMO 2020 marks ‘the biggest change in oil market history’

The International Maritime Organization (IMO) will enforce new emissions standards on January 1, 2020. The rule change is designed to significantly curb pollution produced by the world’s ships.

Arterra | Universal Images Group | Getty Images

Tens of thousands of ships sailing the world’s oceans burn more than 3 million barrels of sludge-like high-sulfur fuel every single day. But, starting next year, the shipping industry will have to comply with rules that should dramatically reduce sulfur emissions.

“It is the biggest change in oil market history,” Steve Sawyer, senior analyst at energy consultant Facts Global Energy, told CNBC.

“It is going to affect crude oil producers, traders, ship owners, refiners, equity investors, insurance companies, logistical businesses, banks… Who’s left? I’m struggling to think of anyone it might not affect. That’s why it is a huge transition,” Sawyer said.

With less than six months to go before the new rules on marine fuels come into force, CNBC takes a look at the far-reaching consequences of the coming changes.

What is IMO 2020?

On January 1, 2020, the International Maritime Organization (IMO) will enforce new emissions standards designed to significantly curb pollution produced by the world’s ships.

Amid a broader push towards cleaner energy markets, the IMO is set to ban shipping vessels using fuel with a sulfur content higher than 0.5%, compared to levels of 3.5% at present.

The most commonly used marine fuel is thought to have a sulfur content of around 2.7%.

There is a brick wall coming at the end of December which has been built for over two years. I think you can either run into it head first and say: ‘that hurts,’ or you can find a way around it. “

Steve Sawyer

Senior analyst at Facts Global Energy

The new regulations are the result of a recommendation that came from a subcommittee at the United Nations (UN) more than a decade ago and was adopted in 2016 by the UN’s IMO, which sets rules for shipping safety, security and pollution.

More than 170 countries, including the U.S., have signed on to the fuel change.

Starting in 2020, ships found in violation of the new laws risk being impounded and ports in cooperating countries are expected to police visiting vessels.

Why does it matter?

“It is an enormous switch. If you considered shipping alongside all of the oil consuming nations, it would be number four or five on the list — so it is an enormous amount of consumption,” Anthony Gurnee, CEO of Ardmore Shipping, told CNBC’s “Squawk Box Europe” last week.

Ardmore Shipping is a U.S.-listed company based in Ireland, with a business of owning and operating a fleet of tankers that move refined oil products.

“We are going to a fundamentally different type of fuel. It is having a bigger impact actually on the refining industry than it is on shipping,” Gurnee said.

The forthcoming measures are widely expected to create an oversupply of high-sulfur fuel oil while sparking demand for IMO-compliant products — thus ratcheting up the pressure on the refining industry to produce substantially more of the latter.

This is especially important, energy analysts say, because Middle Eastern oil producers — such as OPEC kingpin Saudi Arabia — are likely to lose out given their over-reliance on crude with a high-sulfur content.

The shipping industry is under intense pressure to slash its sulfur emissions, given the pollutant is a component of acid rain, which harms vegetation and wildlife, and contributes to the acidification of the oceans.

The proposed rule change comes at a time when the stakes are high for the world’s shipping vessels. Late last year, analysts at UBS estimated the green shipping market could be worth at least $250 billion over the next five years.

Is there any chance it could be delayed?

In a word: no.

The IMO has said there can now be no change to the implementation date, as it is too late for any revisions to take place before January 1, 2020.

What must ships do to meet the new regulations?

Ship owners can significantly reduce their sulfur emissions by using low-sulfur fuel, traveling more slowly, installing exhaust gas cleaning systems or opting for other — more expensive — clean fuels such as liquefied natural gas.

Some ships will chose to limit the air pollutants by installing exhaust gas cleaning systems, known as “scrubbers.” These are designed to remover sulfur oxides from the ship’s engine and boiler exhaust gases.

A ship fitted with a scrubber could continue to use heavy oil, since the sulfur oxide emissions would be reduced to a level equivalent to the required limit.

A support vessel flying an Iranian national flag sails alongside the oil tanker ‘Devon’ as it prepares to transport crude oil to export markets in Bandar Abbas, Iran, on Friday, March 23, 2018.

Ali Mohammadi/Bloomberg via Getty Images

Analysts estimate the container industry — which transports consumer goods such as sofas, designer clothes and bananas — is likely to be among those hit the hardest, with additional costs of approximately $10 billion, according to a Reuters report.

The world’s two largest container shipping lines, A.P. Moller-Maersk and MSC, have both reportedly said that falling in line with IMO regulations is likely to incur extra costs of roughly $2 billion each.

“I am a firm believer that the market will find a balance,” Sawyer said.

“Let me put it this way, there is a brick wall coming at the end of December which has been built for over two years. I think you can either run into it head first and say: ‘that hurts,’ or you can find a way around it.”

— CNBC’s Patti Domm contributed to this report.