Zeroing In: A guide for the finance sector on the International Energy Agency’s Net Zero Emissions scenario and its implications for oil and gas finance

This briefing provides financial institutions with an overview of the International Energy Agency’s (IEA) Net Zero Emissions by 2050 (NZE) scenario, specifically regarding the implications for oil and gas capital allocation. It explains why limiting global warming to 1.5°C precludes the development of new oil and gas fields and discusses the role of the finance sector in aligning investments with Paris goals.

• To limit global warming to 1.5°C, there is no requirement for new oil or gas fields to be developed after 2021. This is because oil and gas consumption must decline by approximately 3%–5% per year, which aligns with the average 4% annual production decline of conventional existing fields.
• The IEA's conclusion that new oil and gas development is unnecessary is supported by other 1.5°C pathways, including those from the Intergovernmental Panel on Climate Change (IPCC), provided those scenarios do not rely on unrealistic levels of carbon dioxide removal or land conversion.
• The IEA's NZE scenario relies on the deployment of carbon capture and storage (CCS) to capture combustion emissions, requiring 800 average-sized plants worldwide by 2030 (approximately two new plants per week). However, only 27 commercial-scale plants currently exist, and avoiding CCS uncertainties would necessitate an even faster fossil fuel phase-out.
• The IEA's Net Zero scenario serves as a new minimum standard for the finance sector—including banks, insurers, and investors—to ensure oil and gas investments are aligned with Paris goals.

APA

Trout,, G. M. (2022). Zeroing In: A guide for the finance sector on the International Energy Agency’s Net Zero Emissions scenario and its implications for oil and gas finance. International Institute for Sustainable Development. https://www.iisd.org/publications/zeroing-finance-sector-oil-gas

Chicago

Trout,, Greg Muttitt,Kelly. Zeroing In: A guide for the finance sector on the International Energy Agency’s Net Zero Emissions scenario and its implications for oil and gas finance. International Institute for Sustainable Development, 2022. https://www.iisd.org/publications/zeroing-finance-sector-oil-gas.

Wikipedia

{{cite report |last1=Trout, |first1=Greg Muttitt,Kelly |title=Zeroing In: A guide for the finance sector on the International Energy Agency’s Net Zero Emissions scenario and its implications for oil and gas finance |publisher=International Institute for Sustainable Development |date=14 February 2022 |url=https://www.iisd.org/publications/zeroing-finance-sector-oil-gas |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{trout2022zeroing, author = {Trout,, Greg Muttitt,Kelly}, title = {{Zeroing In: A guide for the finance sector on the International Energy Agency’s Net Zero Emissions scenario and its implications for oil and gas finance}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = feb, url = {https://www.iisd.org/publications/zeroing-finance-sector-oil-gas}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }