Global transition to renewable energy sources will slow in 2023, political group says

SINGAPORE (Reuters) – The global transition to renewable energy sources in key energy-intensive sectors slowed in 2023, helped by regulatory gaps, political pressure and a lack of clear targets, a policy group said on Wednesday.

The Covid-19 pandemic and the war in Ukraine have helped drive a shift to renewable energy sources amid growing energy security concerns, but governments have failed to capitalize on the momentum, according to an annual assessment by the Paris-based REN21 group.

By the end of last year, only 13 countries – including the United States, India and China – had implemented renewable energy policies covering buildings, industry, transport and agriculture, with only 12.7% of the energy consumed by these sectors coming from clean sources. said REN21.

Many countries have even backed away from their ambitions: of the 69 countries that have set renewable energy targets for end-users, only 17 have extended them beyond 2024, said REN21, which brings together governments, research institutions and non-governmental organizations to promote the transition to clean energy.

“Governments have essentially withdrawn their ambitions and energy-intensive sectors no longer have economic incentives,” said REN21 Executive Director Rana Adib.

The report warned that countries are slow to implement reforms and that trillions of dollars in subsidies allocated to fossil fuels, particularly in industry and agriculture, continue to hinder the energy transition.

Falling fossil fuel prices in 2023 have also influenced policymaking, and the debate over the costs of transitioning to cleaner energy has intensified, especially as many countries approach elections, Adib said.

Decarbonizing heavy industry remains a major challenge, with “hard to contain” sectors such as cement and steel arguing that renewables cannot produce the heat required to fire furnaces and blast furnaces.

But while transforming the industry may prove to be a bigger challenge than transportation, there are solutions, including using electric arc furnaces to produce steel, Adib said.

“The words ‘difficult to reduce’ already send a signal that these are sectors that are almost impossible to decarbonize, which is not true,” she said.

(Reporting by David Stanway; Editing by Jacqueline Wong)