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PARIS: The current $800 billion invested annually in the global oil and gas sector could be halved by 2030 if a goal to limit global warming to 1.5 degrees Celsius is to be reached, the International Energy Agency (IEA) said in a report Thursday.

The report added that no new long-lead-time oil and gas sector projects would be needed if that goal were to be reached, and some current projects would need to be shuttered.

The highest emitters in the global oil and gas industry have “vast potential for improvements”, the IEA said, as they face choices amid a climate crisis fuelled in large part by their products.

The industry will need to reduce emissions by 60% by 2030 in order for the industry to align with climate goals to limit warming to the 1.5C above pre-industrial average defined in the Paris agreement, the IEA said.

Temperatures this year are set to be the world’s warmest in 125,000 years, and there are concerns that the 1.5C threshold could be breached as early as this decade, which would lead to more and deadlier climate disasters.

Oil market on edge over Middle East crisis, IEA’s Birol says

“With the world suffering the impacts of a worsening climate crisis, continuing with business as usual is neither socially nor environmentally responsible,” IEA executive director Fatih Birol said.

Oil and gas companies account for just 1% of global clean energy investment, with 60% of that coming from just four companies, making it a “marginal force at best” in transitioning to a clean energy system, the IEA said.

However, the IEA does not expect the industry will disappear in the transition to net zero emissions, as some investments will be needed to ensure security of energy supply and provide fuel for sectors where emissions are harder to abate.

The skills and resources from the oil and gas sector are also well placed to help scale up clean energy technologies - like hydrogen, carbon capture, offshore wind and liquid biofuels - which can account for 30% of energy consumed in 2050.

Global demand for oil and gas is expected to peak by 2030, the IEA report said, with demand seen falling by 45% by 2050 from today’s levels if governments deliver on their national energy and climate pledges.

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