which must also collectively reduce emissions. The Intergovernmental Panel on Climate Change, or IPCC, which is the United Nations body for assessing the science related to climate change, has
developed models on future energy demand and mix, and are amongst the most respected and cited models in the world. At ExxonMobil, we use the IPCCs projections along with other third party projections in developing our strategies and plans. As
shown in the middle bar chart, and the high and low ranges to its right, the IPCC lower 2 degrees scenarios project a variety of global energy demand outcomes with differences in absolute demand and in energy mix. The middle bar shows the
average estimated energy demand and mix in 2040. And you can compare that with the 2019 total demand of energy reported by the International Energy Agency on the left. On average, the scenarios project that by 2040 wind and solar will grow to be
more than tenfold what it is today. And the use of coal will significantly decrease. Importantly, those scenarios project an essential role for natural gas and oil, as do other third party scenarios that meet the objectives of the Paris Agreement.
To understand whats happening here, lets look at whats driving the continued need for natural gas and oil.
The continuing demand for
natural gas and oil is concentrated in three sectors, as illustrated in this pie chart. Power generation, industrial and commercial transportation. A growing global population with higher living standards drives the demand for power generation for
electricity. Growing economies lead to higher levels of industrial activity and that requires higher density fuel and feedstock. And both growing populations and greater industrialization also increase the demand for commercial transportation. The
IPCC projects that these three sectors will account for about 80% of energy demand by 2040. And thats a similar level to today. There is currently a lack of alternatives to meet the full range of needs in these three important sectors that
underpin modern living standards. As a result, for society to meet its ambitions for a lower carbon energy future, emissions in these three hard to decarbonize sectors needs to be addressed.
On this chart, we can take a closer look at the challenges in each sector and how they can be addressed. Now firstly to further reduce emissions, innovations
are required. The International Energy Agency reports that only six of the estimated 46 technologies that would be needed to accomplish the emissions reductions expectations are on track today. Looking at power generation, society needs on demand
electricity around the clock. Today, natural gas represents a lower carbon alternative to coal, and when natural gas is used to generate power, it produces around 60% less CO2 emissions compared to coal. So natural gas in power generation offers an
immediate, large scale and proven option to make significant progress in lowering global emissions. Wind and solar provide an even greater emissions reduction. However, both wind and solar are challenged by intermittency, and in many places around
the world, insufficient days when sun or wind is a major contributor. Batteries can help, but a breakthrough in battery energy density is needed for cost effective long term storage. Gas-fired power generation
remains an option where emissions can be captured and stored. Hydrogen can also be a solution if the cost of production can be lowered. All of these potential solutions for power generation requires significant technology advances.
In commercial transportation, large trucks and ships and airplanes require significant power, an energy density to achieve the needed scale and range of
transportation. Todays batteries lack sufficient energy density for these heavy duty applications. And batteries end up too costly, too heavy, or take too long to recharge, making them impractical. Breakthroughs in battery technology and in
hydrogen will be needed to reduce emissions in the heavy duty transport area. Also, lower costs biofuels that dont compete for food, fresh water or land could also provide a lower carbon alternative. However, all of these do require technology
advances.
In the industrial sector, many of the manufacturing process used to produce the goods that support modern life, require intense heat. Today
there is almost no alternative fuel that meets this requirement. Hydrogen offers one possibility, but lowering the total cost of production is required. Alternatively, emissions from these processes could be captured, utilized and stored with
advances that lower the cost and capability of carbon capture and storage.
So as you can see, there are significant technical challenges for each of
these three sectors. Solving these challenges will require the combined efforts of businesses and governments and academia. And I do believe that in forums like the ones youre participating in at this workshop, provides the opportunity to
further the discussion on these technology options.