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Stated Policies Scenario (STEPS)

The STEPS provides a more conservative benchmark for the future, because it does not take it for granted that governments will reach all announced goals. Instead, it takes a more granular, sector-by-sector look at what has actually been put in place to reach these and other energy-related objectives, taking account not just of existing policies and measures but also of those that are under development. For example, the new “Fit for 55” package of measures announced by the European Commission in July 2021 provides the detailed underpinnings for the European Union to reach its new 2030 emissions reduction target (a 55% reduction in emissions by 2030 compared with 1990 levels), and this is sufficient to bring the near-term EU trajectory in the STEPS close to that in the APS. The STEPS explores where the energy system might go without a major additional steer from policy makers. As with the APS, it is not designed to achieve a particular outcome.

The policies assessed in the Stated Policies Scenario cover a broad spectrum. These include Nationally Determined Contributions under the Paris Agreement, but much more besides. In practice, the bottom-up modelling effort in this scenario requires a lot of detail at the sectoral level, including pricing policies, efficiency standards and schemes, electrification programmes as well as specific infrastructure projects. For the World Energy Outlook 2021, the scenario takes into account the policies and implementing measures affecting energy markets that had been adopted as of mid-2021, together with relevant policy proposals, even though specific measures needed to put them into effect have yet to be fully developed.

The sorts of announcements made by governments include some far-reaching targets, including aspirations to achieve full energy access in a few years, to reform pricing regimes and, more recently, to reach net zero emissions in some countries and sectors. As with all the policies considered in the Stated Policies Scenario, these ambitions are not automatically incorporated into the scenario: full implementation cannot be taken for granted, so the prospects and timing for their realisation are based upon our assessment of countries’ relevant regulatory, market, infrastructure and financial circumstances.

Where policies are time-limited, they are generally assumed to be replaced by measures of similar intensity, but we do not assume future strengthening – or weakening – of future policy action, except where there already is specific evidence to the contrary.

The STEPS shows that in aggregate, current country commitments are enough to make a significant difference. However, there is still a large gap between the projections in the Stated Policies Scenario and a trajectory of the other three scenarios.