The New Energy Outlook (NEO) is BloombergNEF’s long-term scenario analysis on the future of the energy economy covering electricity, industry, buildings and transport and the key drivers shaping these sectors until 2050.
This edition presents detailed country-level energy and climate scenarios for corporates, financial institutions and policy makers navigating the energy transition.
The Economic Transition Scenario is our baseline assessment of how the energy transition might evolve from today as a result of cost-based technology changes.
The Net Zero Scenario describes an economics-led evolution of the energy economy to achieve net-zero emissions in 2050. This scenario combines faster and greater deployment of renewables, nuclear and other low carbon dispatchable technologies in power with the uptake of cleaner fuels in end-use sectors, most notably hydrogen and bioenergy. Taking a sector-led approach, it describes a credible pathway to meet the goals of the Paris Agreement.
2. Carbon Budgets
Our modelling shows that, while a pathway that limits global temperature increases to 1.5 degrees Celsius by 2050 looks increasingly out of reach, there are still plausible pathways to stay within 1.77C of warming in our Net Zero Scenario. Even then, a revolution will be needed in the energy sector to increase momentum and accelerate emissions reductions.
Our modelling suggests emissions need to fall by 30% by 2030 and overall 6% a year to 2040. If achieved, this orderly transition would reach zero emissions in 2050 and achieve the Paris Agreement objective, with climate change of 1.77C by 2050, without overshooting or creating the need for net-negative emissions post-2050. In contrast, emissions in our Economic Transition Scenario fall at 0.9% on average each year, resulting in emissions consistent with 2.6C warming trajectory by the end of the century.
Million metric tons of hydrogen demand, 2050
Gigatons of carbon dioxide captured, 2050
Source: BloombergNEF Note: Wind, solar, carbon capture and storage (CCS), and nuclear uptake based on installed capacity in the power sector. Electric vehicle (EV) uptake based on passenger electric vehicle annual sales as modeled under BNEF’s New Energy Outlook Net Zero Scenario. Heat pumps based on fuel consumption for residential heat pumps. Hydrogen uptake based on power demand from grid-connected electrolyzers.
Note: Carbon capture and storage (CCS) includes investment in power sector (fossil fuel plant and CCS equipment), industry and blue hydrogen production (CCS equipment), as well as storage and transport infrastructure across all sectors.
Head of Economics & Modeling, Lead author
Head of Energy Economics
Dr. Ian Berryman
Dr. Kwasi Ampofo
Head of Research
With support from
Dr. Julia Attwood
Electric vehicle charging
Dr. Ali Izadi-Najafabadi
David Lluis Madrid
Dr. Tom Rowlands-Rees
Dr. Nikolas Soulopoulos
Allen Tom Abraham