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As oil and gas producers face pivotal choices about their role in the global energy system amid a worsening climate crisis fuelled in large part by their core products, a major new special report from the International Energy Agency (IEA) on Thursday showed how the industry can take a more responsible approach and contribute positively to the new energy economy.

The Oil and Gas Industry in Net Zero Transitions, analyses the implications and opportunities for the industry that would arise from stronger international efforts to reach energy and climate targets.

Released ahead of the COP28 climate summit in Dubai, the special report sets out what the global oil and gas sector would need to do to align its operations with the goals of the Paris Agreement.

Even under today’s policy settings, global demand for both oil and gas is set to peak by 2030, according to the latest IEA projections.

Stronger action to tackle climate change would mean clear declines in demand for both fuels.

If governments deliver in full on their national energy and climate pledges, demand would fall 45 per cent below today's level by 2050.

In a pathway to reaching ‘net-zero’ emissions by mid-century, which is necessary to keep the goal of limiting global warming to 1.5 degrees Celsius within reach, oil and gas use would decline by more than 75 per cent by 2050.

Yet the oil and gas sector, which provides more than half of global energy supply and employs nearly 12 million workers worldwide, has been a marginal force at best in transitioning to a clean energy system, according to the report.

Oil and gas companies currently account for just one per cent of clean energy investment globally -- and 60 per cent of that comes from just four companies.

“The oil and gas industry is facing a moment of truth at COP28 in Dubai. With the world suffering the impacts of a worsening climate crisis, continuing with business as usual, is neither socially nor environmentally responsible,” said IEA Executive Director Fatih Birol.

“Oil and gas producers around the world need to make profound decisions about their future place in the global energy sector. The industry needs to commit to genuinely helping the world meet its energy needs and climate goals, which means letting go of the illusion that implausibly large amounts of carbon capture are the solution.

“This special report shows a fair and feasible way forward in which oil and gas companies take a real stake in the clean energy economy while helping the world avoid the most severe impacts of climate change,”said Fatih Birol.

Responding to the IEA report, COP28 CEO Adnan Amin said the report reinforces the need for COP28 to be an inflection point in the world’s efforts to tackle climate change and keep 1.5 within reach.

The world must deliver an ambitious decision on the Global Stocktake and give some good news.

“The report specifically notes that all sectors must be part of the solution. Real tangible climate action will only come with everyone at the table, and we have always said that we cannot have an energy transition without the energy industry.

“I have consistently called on oil and gas sector to aim for the highest possible ambitions and deliver urgent action through decarbonisation. We believe the oil and gas industry can do more. That is why I have been calling for the oil and gas industry to align around ‘net zero’ by or before 2050 and zero out methane emissions by 2030. They must decarbonise their own businesses and support the global transition.”