The International Energy Agency report, which has urged oil producers “to commit to green investment and climate goals or continue a high-risk business as usual strategy,” reinforces the need for COP28 to be an inflection point in the world’s efforts to tackle climate change and keep 1.5C temperature goal within reach, Adnan Amin, CEO of COP28 said on Thursday.

“The world must deliver an ambitious decision on the Global Stocktake (an assessment of progress made toward mitigating global warming) and give the world some good news,” Amin said, adding that the report specifically noted 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,” he said in a statement.

Amin’s call comes days ahead of the landmark COP28 summit opening in Dubai.

IEA Executive Director Fatih Birol said in the report that the industry was now facing a "moment of truth" at the COP28 Climate Summit, given the scale of the climate crisis and the lack of investment and support for the net zero transition among oil and gas firms worldwide.

“I have consistently called on oil and gas 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,” the CEO of COP28 said.

The IEA in its report released on Thursday sets out a potential roadmap for how the oil and gas industry could contribute positively to a "new energy economy." The report warns that the oil and gas sector has been a "marginal force at best" in the transition to a clean energy system, despite being well placed to scale up crucial technologies for the net zero transition, including hydrogen, carbon capture storage, and utilisation (CCUS), liquid biofuels and offshore wind.

Oil and gas firms' core energy products are fuelling the climate crisis and yet just 2.5 per cent of the sector's total capital expenditure goes on clean energy, the IEA noted.

The Paris-based body said a "reasonable ambition" for oil and gas producers looking to align with the 1.5C temperature goal of the Paris Agreement would be to earmark 50 per cent of their capital expenditures on clean energy projects by 2030. “That would be on top of the investment required to significantly reduce operational and power emissions from within the oil and gas industry,” it added.

In 2022, the global oil and gas industry's total capital investment amounted to around $800 billion ---largely for supporting fossil fuel operations --- which the IEA said is around double what would be needed each year by 2030 to decarbonise production in line with a 1.5C scenario.

Birol said oil and gas producers around the world need to make profound decisions about their future place in the global energy sector. "With the world suffering the impacts of a worsening climate crisis, continuing with business as usual is neither socially nor environmentally responsible," he said.

"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."

The IEA's report accuses the industry of "excessive expectations and reliance" on CCUS. While the technology is essential for achieving climate goals in certain sectors and circumstances, it should not be touted by oil and gas firms as a way to retain the status quo and high levels of fossil fuel production, the report emphasises.

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