The Covid-19 pandemic and resulting economic crisis had an impact on almost every aspect of how energy is produced, supplied, and consumed around the world. The pandemic defined energy and emissions trends in 2020 – it drove down fossil fuel consumption for much of the year, whereas renewables and electric vehicles, two of the main building blocks of clean energy transitions, were largely immune.
As primary energy demand dropped nearly 4% in 2020, global energy-related CO2 emissions fell by 5.8% according to the latest statistical data, the largest annual percentage decline since World War II. In absolute terms, the decline in emissions of almost 2 000 million tonnes of CO2 is without precedent in human history – broadly speaking, this is the equivalent of removing all of the European Union’s emissions from the global total. Demand for fossil fuels was hardest hit in 2020 – especially oil, which plunged 8.6%, and coal, which dropped by 4%. Oil’s annual decline was its largest ever, accounting for more than half of the drop in global emissions. Global emissions from oil use plummeted by well over 1 100 Mt CO2, down from around 11 400 Mt in 2019. The drop in road transport activity accounted for 50% of the decline in global oil demand, and the slump in the aviation sector for around 35%. Meanwhile, low-carbon fuels and technologies, in particular, solar PV and wind, reached their highest ever annual share of the global energy mix, increasing it by more than one percentage point to over 20%.
A common theme across all economies is the scale of the impact of the pandemic and lockdown measures on transport activity. The decline in CO2 emissions from oil use in the transport sector accounted for well over 50% of the total global drop in CO2 emissions in 2020, with restrictions on movement at local and international levels leading to a near 1 100 Mt drop in emissions from the sector, down almost 14% from 2019 levels. With various travel advisories and border restrictions, international aviation was the sector hardest hit in 2020, with global flight activity reaching a low in April 2020 of 70% below the level in the same month a year earlier. In contrast to pre-crisis levels, emissions from international aviation fell by almost 45% or 265 Mt CO2 across the year to a level last seen in 1999. This decline is equivalent to taking around 100 million conventional cars off the road.
Road transport was also severely affected, with its demand for oil dropping 10% relative to 2019. The impact of the pandemic on global car sales was even greater: these fell by close to 15%. Electric cars bucked this trend, however, with their sales growing by more than 40% in 2020 to over 3 million, largely driven by policy support in the European Union and stimulus measures in the People’s Republic of China (“China”). This is an encouraging sign for clean energy transitions globally, although emissions growth last year from the continued shift towards larger vehicles such as SUVs offset the decrease in emissions from higher electric car sales.
With transport typically accounting for around 60% of oil demand, and the drop in oil demand contributing the largest share to the decline in 2020 emissions, the recovery of global transport activity is an important bellwether for the rebound in global oil demand and in global CO2 emissions. In emerging economies, the recovery of road transport activity through the second half of 2020 was one of the principal drivers of the rebound in emissions. In advanced economies, road transport activity remained suppressed through the second half of 2020 relative to 2019 levels.
In the power sector, CO2 emissions declined by 3.3% (or 450 Mt) in 2020, the largest relative and absolute fall on record. While the pandemic reduced electricity demand last year, the accelerating expansion of power generation from renewables was the biggest contributor to lower emissions from the sector. The share of renewables in global electricity generation rose from 27% in 2019 to 29% in 2020, the biggest annual increase on record. Over the last ten years, the rise of renewables in the power sector has been having a growing impact on that sector’s emissions, with avoided carbon emissions growing by an average 10% each year. Despite the shock of the pandemic, renewables accelerated their expansion in 2020, with a 50% increase in their contribution to lowering power sector emissions relative to 2019.
At a regional level, the different responses to the pandemic impacted emissions in different ways. On average, advanced economies saw the steepest declines in annual emissions in 2020, averaging drops of almost 10%, while emissions from emerging market and developing economies fell by 4% relative to 2019. Most economies saw a decline of five-to-ten percentage points compared to recent rates of emissions growth, with lesser declines in Brazil and most notably, China. The only major economy to record an increase in annual CO2 emissions in 2020, China’s emissions growth slowed by just one percentage point compared with its average rate over the 2015 to 2019 period.
Last year, for the first time the IEA began to track energy demand and CO2 emissions trends on a monthly basis – and in some cases, in real-time. This provides a valuable tool for understanding the impacts of the pandemic on the energy sector. In January 2020, weather was the major driver of lower global CO2 emissions relative to 2019, with heating needs in major economies such as the United States, Germany, the United Kingdom and Russia 15% to 20% lower than in January 2019, due to milder-than-usual weather. The impact of the pandemic started to be felt in late February; and, by April, global emissions registered their largest monthly drop when a majority of advanced economies experienced various forms of restrictions on movement and travel. As the first wave of the pandemic was brought under control and economic activity increased towards the middle of the year, emissions increased. They continued to rebound through the rest of the year. In December 2020, global emissions were 2% higher than they were in the same month a year earlier.
Major emitters underpinned the rebound of global CO2 emissions in 2020, as a pick-up in economic activity boosted energy demand, with many economies already seeing emissions above pre-COVID levels. China, the first major economy to emerge from the pandemic and lift restrictions, saw a 7% increase in emissions in December 2020 compared with a year earlier. Emissions in India rose above 2019 levels in September as the economic environment improved and restrictions were relaxed. Meanwhile, the Diwali holiday period in November 2020 (rather than October, as in the previous year), as well as strikes in the agricultural sector, temporarily lowered energy demand and emissions in November. In Brazil, the recovery of road transport activity in September drove a recovery in oil demand, while increases in gas demand in the later months of 2020 pushed emissions above 2019 levels. Emissions in the United States fell by 10% in 2020. But on a monthly basis, after hitting their lowest levels in April and May, they started to bounce back. In December, US emissions were approaching the level seen in the same month the year before, as greater economic activity and the combination higher natural gas prices and of colder weather favoured an increase in coal use.
In China, the world’s largest CO2 emitter and the first country to be impacted by the Covid-19 pandemic, CO2 emissions dropped by 12% in February relative to the same month in 2019, as economic activity was curtailed. In April, China’s economic recovery lifted its monthly CO2 emissions above their 2019 level. For the remainder of the year, emissions in China were on average 5% higher than 2019 levels. The latest annual figures indicate that the country’s overall CO2 emissions in 2020 were 0.8% (or 75 Mt CO2) above the levels assessed at the end of 2019.
In India, annual CO2 emissions declined by 7% (or 160 Mt CO2) in 2020, a stark contrast with its average emissions growth of 3.3% from 2015 to 2019. With India’s almost 1.4 billion citizens in total lockdown during April 2020, emissions in that month fell by a staggering 40% compared with April 2019, the largest decline in a single month experienced by any major economy. Annual emissions from coal-fired power plants across India fell by 5% relative to 2019, adjusting to lower electricity demand while generation from renewables grew by close to 4%, increasing their share in the generation mix to 22%. With most industrial production and freight transport coming to a standstill during the lockdown, annual emissions from the transport and industry sectors both declined by close to 50 Mt CO2. This resulted in the lowest recorded levels of air pollution in recent years in many major Indian cities. In September, a rebound in economic activity saw energy demand in India return to 2019 levels, albeit a low bar given the economic slowdown towards the end of 2019.
The impact of the pandemic on advanced economies endured well beyond the initial lockdowns of March and April. Economic activity remained at lower levels for much of the second half of the year and dropped again in the final months of 2020 as new restrictions on movement were imposed in many countries. Nonetheless, the impact of a second wave of lockdowns on energy demand was lower than that of earlier lockdowns, and many advanced economies are already well on the way to seeing a recovery in their emissions.
In the United States, the lack of national lockdowns mitigated the impact of the enduring health crisis on overall energy use and emissions. Nonetheless, stay-at-home orders in several states and the economic crisis induced by the pandemic led overall annual CO2 emissions to decline by more than 10%, or almost 500 Mt CO2. Transport emissions fell the most, with a 14% decline as activity plummeted in April. Emissions in the United States have been on a declining trend in recent years, largely due to changes in the power sector. With a strong coal-to-gas shift as natural gas prices have moved towards historic lows, and the rapid growth of renewables, emissions from coal-fired power generation declined 27% from 2015 to 2019. This trend accelerated in 2020, with monthly inflation adjusted gas prices hitting an all-time low of USD 1.63 per million British thermal units in June at Henry Hub, and lower electricity demand driving emissions from coal generation down by a further 20%. However, coal demand would have fallen even further if not for the increase in gas prices in the second half of the year and the subsequent reversal of some coal-to-gas switching. This trend combined with colder temperatures to push up emissions in December.
Across the European Union, a region that saw multiple restrictions and lockdowns being imposed in almost all member states, annual CO2 emissions fell by 10% relative to 2019. Lower electricity demand across the bloc and an 8% increase in output from renewables drove a more than 20% decline in coal-fired power generation. As a result, the share of renewables in electricity generation increased to a record 39% in 2020, four percentage points higher than in 2019. Transport oil demand fell by 12%, a consequence of strict lockdown measures and restrictions on intra-European movement. In Germany, overall energy-related CO2 emissions dropped by almost 9% in 2020, with generation from coal-fired power plants falling by over 20% due to lower electricity demand and higher output from wind and solar. In France, annual emissions were 11% lower than in 2019, with emissions from transport declining by almost 20 Mt CO2 and accounting for 60% of the total reduction in France’s emissions as a result of the two nationwide lockdowns in the spring and autumn.
While 2020 marked the largest absolute decline in global CO2 emissions in history, the evidence of a rapid rebound in energy demand and emissions in many economies underscores the risk that CO2 emissions will increase significantly this year. What happens to energy demand and emissions in 2021 and beyond will depend on how much emphasis governments put on clean energy transitions in their efforts to boost their economies in the coming months. Avoiding a rebound in emissions requires rapid structural changes in how we use and produce energy. The IEA Sustainable Recovery report, published in June 2020, outlined a pathway to avoid a rebound in emissions, with the Sustainable Recovery Plan providing clear recommendations on how to create jobs, boost economic growth and significantly reduce emissions simultaneously.
Ensuring that 2019 marks a definitive peak in global CO2 emissions will be extremely challenging, but last year offers some valuable lessons that provide cause for optimism as we look ahead. Many power systems successfully kept the lights on, allowing hospitals to function or communication systems to operate with much higher shares of variable renewables. This provides a glimpse of things to come and offers greater confidence in operating large electricity systems powered with higher shares of renewables. Further, consumer preference for electric vehicles continues to grow, as does the number of electric vehicle models available.
The IEA draws upon a wide range of respected statistical sources to construct estimates for the year 2020 and the month-to-month evolutions of energy demand and CO2 emissions. Sources include the latest monthly data submissions to the IEA Energy Data Centre (including December 2020 when available), real-time data from power system operators across the world, other statistical releases from national administrations, and recent market data from the IEA Market Report Series that covers coal, oil, natural gas, renewables and electricity. Where data are not available on an annual or monthly basis, estimates may be used.
CO2 emissions include emissions from all uses of fossil fuels for energy purposes. CO2 emissions do not include emissions from industrial processes, industrial waste and non-renewable municipal waste. CO2 emissions from international marine and aviation bunkers are included at the world level only.