bnef carbon zero

1. New Energy Outlook
2021
Roads to Carbon Neutrality: COP26 Nordic Pavilion
Albert Cheung
Head of Analysis
November 8, 2021

3. 2 New Energy Outlook 2021
Net-zero scenarios come in different
shapes
Source: BloombergNEF, IPCC Note: The Economic Transition Scenario is BloombergNEF’s baseline
economics-led scenario last published in the New Energy Outlook 2020.
0
5
10
15
20
25
30
35
40
2012 2020 2025 2030 2035 2040 2045 2050
GtCO2
1.8°C
2°C
1.75°C
1.5°C
3.3°C
Economic Transition Scenario
Climate impact of different pathways to net zero
A range of net-zero scenarios

4. 3 New Energy Outlook 2021
0
200
400
600
800
1.000
1.200
2018 2030 2040 2050
GtCO2
2°C
1.75°C
1.5°C
Cumulative emissions in the Economic
Transition Scenario
The Economic Transition Scenario breaches a
1.5⁰ budget by 2027
Source: BloombergNEF, IPCC
Cumulative energy emissions 2018-2050, and climate outcomes

5. 4 New Energy Outlook 2021
NEO 2021: a Paris-aligned, sector-based trajectory
Net-zero emission budget
consistent with a 1.75DC
trajectory
Economic Transition Scenario
0
5
10
15
20
25
30
35
2012 2020 2025 2030 2035 2040 2045 2050
GtCO2 Power
Energy industry
Other
Aviation
Shipping
Road
Commercial
Residential
Other Industry
Petrochemicals
Cement
Aluminum
Steel
Source: BloombergNEF
Principles behind
sectoral emissions
budgets
● No free riders
● Net zero in 2050
● Paris Agreement
● Current emissions
trends
● Current abatement
options
● “Orderly transition”
Global carbon budget by sector, to meet zero emissions in 2050
and keep warming to ~1.75 degrees C

7. 6 New Energy Outlook 2021
Green Scenario Gray Scenario Red Scenario
Three pathways to meet the carbon
budget
Electrification and
renewable energy
“Green”
hydrogen
Electrification and
renewable energy
Electrification and
renewable energy
Fossil fuels +
CCS + removals
“Blue”
hydrogen
“Red”
hydrogen
Nuclear
power
Bioenergy
Recycling
Demand-side efficiency
Bioenergy Bioenergy

8. 7 New Energy Outlook 2021
2020 2030
0
10,000
20,000
30,000
40,000
50,000
60,000
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
MtCO2
Removals
Fuel switch
Other renewables
Wind
Solar
Nuclear
Hydrogen
Bioenergy
CCS
Efficiency/recycling
Electrification
Oil
Gas
Coal
No transition
Budget
Green Scenario: clean power, electrification and
hydrogen drive abatement
Source: BloombergNEF
Clean electricity (shaded area)
Emissions and abatement in the Green Scenario
Oil
Coal
Gas
Electrification
Wind
Solar
Hydrogen

9. 8 New Energy Outlook 2021
2020 2030
0
10,000
20,000
30,000
40,000
50,000
60,000
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
MtCO2
Removals
Fuel switch
Other renewables
Wind
Solar
Nuclear
Hydrogen
Bioenergy
CCS
Efficiency/recycling
Electrification
Oil
Gas
Coal
No transition
Budget
Gray Scenario: CCS makes up 15% of total
abatement, clean power still critical
Source: BloombergNEF
Clean electricity (shaded area)
Emissions and abatement in the Gray Scenario
CCS (power)
CCS other
Oil
Coal
Gas
Wind
Solar
Electrification

10. 9 New Energy Outlook 2021
2020 2030
0
10,000
20,000
30,000
40,000
50,000
60,000
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
MtCO2
Removals
Fuel switch
Other renewables
Wind
Solar
Nuclear
Hydrogen
Bioenergy
CCS
Efficiency/recycling
Electrification
Oil
Gas
Coal
No transition
Budget
Red Scenario: nuclear partially displaces renewables
to meet power demand and produce hydrogen
Source: BloombergNEF
Clean electricity (shaded area)
Emissions and abatement in the red scenario
Nuclear
Oil
Coal
Gas
Electrification
Wind
Solar
Hydrogen

11. 10 New Energy Outlook 2021
2019 2050: Green & Red Scenario 2050: Gray Scenario
Final energy consumption: electricity
approaches 50% share
Source: BloombergNEF Source: BloombergNEF Source: BloombergNEF
1%
5%
7%
11%
49%
22%
4%
Coal Gas Oil Bioenergy Electricity Hydrogen Other

12. 11 New Energy Outlook 2021
Green Scenario Gray Scenario Red Scenario
Electricity generation: varying degrees of upside
Source: BloombergNEF. Note: includes generation
for end-use demand & hydrogen production.
Source: BloombergNEF. Note: includes generation
for end-use demand & hydrogen production.
Source: BloombergNEF. Note: includes generation
for end-use demand & hydrogen production.
Coal Gas Oil Coal with CCS Gas with CCS Oil with CCS Hydrogen
Nuclear Bioenergy Other renewables Solar Wind Other
0
20
40
60
80
100
120
2015 2020 2025 2030 2035 2040 2045 2050
1,000 TWh
0
20
40
60
80
100
120
2015 2020 2025 2030 2035 2040 2045 2050
1,000 TWh
0
20
40
60
80
100
120
2015 2020 2025 2030 2035 2040 2045 2050
1,000 TWh

13. 12 New Energy Outlook 2021
0
200
400
600
800
1,000
1,200
1,400
2020 2025 2030 2035 2040 2045 2050
Mt
0
200
400
600
800
1,000
1,200
1,400
2020 2025 2030 2035 2040 2045 2050
Mt
0
200
400
600
800
1,000
1,200
1,400
2020 2025 2030 2035 2040 2045 2050
Mt
Green Scenario Gray Scenario Red Scenario
Hydrogen demand varies widely by scenario
Source: BloombergNEF Source: BloombergNEF Source: BloombergNEF
0
1000
2020 2030 2040 2050
MMt
Power Non-energy use Other Shipping Rail Aviation Road
Commercial Residential Other industry Petrochemicals Cement Aluminum Steel

14. 14 New Energy Outlook 2021
Coal CCGT Peaker gas Oil Coal with CCS
CCGT with CCS Peaker gas with CCS Hydrogen Nuclear Bioenergy
Hydro Utility-scale PV Small-scale PV Onshore wind Offshore wind
Other renewables Other Pumped hydro Battery storage
0 10 20 30 40 50 60
Green
Gray
Red
$ trillion (2020 real)
0 20 40 60
Green
Gray
Red
$ trillion (2020 real)
Clean power investment at $1.1-1.7
trillion per year to 2050
Source: BloombergNEF. Bordered series shows investment range.
Source: BloombergNEF. Bordered series shows
investment range.
For end-use electricity demand For hydrogen production
Cumulative power plant capacity investment, 2020-2050...

16. 16 New Energy Outlook 2021
Getting on track: ~30% emissions reductions
to 2030 from 2019 levels, or -3.2% yoy
Source: BloombergNEF
20
25
30
35
40
45
2018 2020 2022 2024 2026 2028 2030
GtCO2 Fuel switch
Other renewables
Wind
Solar
Nuclear
Hydrogen/CCS
Bioenergy
Efficiency/recycling
Electrification
Fossil fuel
No transition
Emissions constraint
Power sector
Total energy-sector emissions and abatement to 2030, by activity, All Scenarios
This implies:
5xWind deployment
3xSolar deployment
+100x Battery deployment

17. 18 New Energy Outlook 2021
Passenger EV fleet Heat pump deployment Recycled materials
Getting on track to 2030: demand-side
transformation
Source: BloombergNEF Source: BloombergNEF Source: BloombergNEF
0
100
200
300
400
2016 18 20 22 24 26 28 30
million vehicles
EVO 2021 ETS
EVO 2021 NZS
NEO 2021
Green/Red
Gray
0
50
100
150
200
250
2020 22 24 26 28 30
Millioner
Million units
+67%
+44%
+149%
Aluminum Steel Plastics

18. 19 New Energy Outlook 2021
BNEF’s scenarios sit at the lower range
of IPCC emissions outcomes
Source: BloombergNEF, IPCC, Summary for Policymakers. NERC EDS Centre for Environmental Data Analysis, 2021. Note: NEO ETS = Economic Transition
Scenario of NEO 2020. NEO 2021 = emissions trajectory from the Green, Gray and Red Scenarios of NEO 2021. As the New Energy Outlook only captures CO2
emissions from fuel combustion – some 72.5% of global CO2 emissions – historical and future emission trajectories are aligned upwards to match those of the
IPCC’s scenario.
0
10
20
30
40
50
60
70
80
90
2015 2020 2025 2030 2035 2040 2045 2050
billon metric tons of CO2 per year
Very high
High
Medium
Low
Very low
BNEF ETS 2020
BNEF NEO 2021
Annual CO2 emissions in IPCC and BNEF scenarios

19. 20 New Energy Outlook 2021
Copyright
© Bloomberg Finance L.P. 2021. This publication is the copyright of Bloomberg Finance L.P. in connection with BloombergNEF. No portion of this document may be
photocopied, reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any way without prior consent of BloombergNEF.
Disclaimer
The BloombergNEF ("BNEF"), service/information is derived from selected public sources. Bloomberg Finance L.P. and its affiliates, in providing the
service/information, believe that the information it uses comes from reliable sources, but do not guarantee the accuracy or completeness of this information, which is
subject to change without notice, and nothing in this document shall be construed as such a guarantee. The statements in this service/document reflect the current
judgment of the authors of the relevant articles or features, and do not necessarily reflect the opinion of Bloomberg Finance L.P., Bloomberg L.P. or any of their
affiliates (“Bloomberg”). Bloomberg disclaims any liability arising from use of this document, its contents and/or this service. Nothing herein shall constitute or be
construed as an offering of financial instruments or as investment advice or recommendations by Bloomberg of an investment or other strategy (e.g., whether or not
to “buy”, “sell”, or “hold” an investment). The information available through this service is not based on consideration of a subscriber’s individual circumstances and
should not be considered as information sufficient upon which to base an investment decision. You should determine on your own whether you agree with the
content. This service should not be construed as tax or accounting advice or as a service designed to facilitate any subscriber’s compliance with its tax, accounting or
other legal obligations. Employees involved in this service may hold positions in the companies mentioned in the services/information.
The data included in these materials are for illustrative purposes only. The BLOOMBERG TERMINAL service and Bloomberg data products (the “Services”) are
owned and distributed by Bloomberg Finance L.P. (“BFLP”) except (i) in Argentina, Australia and certain jurisdictions in the Pacific islands, Bermuda, China, India,
Japan, Korea and New Zealand, where Bloomberg L.P. and its subsidiaries (“BLP”) distribute these products, and (ii) in Singapore and the jurisdictions serviced by
Bloomberg’s Singapore office, where a subsidiary of BFLP distributes these products. BLP provides BFLP and its subsidiaries with global marketing and operational
support and service. Certain features, functions, products and services are available only to sophisticated investors and only where permitted. BFLP, BLP and their
affiliates do not guarantee the accuracy of prices or other information in the Services. Nothing in the Services shall constitute or be construed as an offering of
financial instruments by BFLP, BLP or their affiliates, or as investment advice or recommendations by BFLP, BLP or their affiliates of an investment strategy or
whether or not to “buy”, “sell” or “hold” an investment. Information available via the Services should not be considered as information sufficient upon which to base an
investment decision. The following are trademarks and service marks of BFLP, a Delaware limited partnership, or its subsidiaries: BLOOMBERG, BLOOMBERG
ANYWHERE, BLOOMBERG MARKETS, BLOOMBERG NEWS, BLOOMBERG PROFESSIONAL, BLOOMBERG TERMINAL and BLOOMBERG.COM. Absence of
any trademark or service mark from this list does not waive Bloomberg’s intellectual property rights in that name, mark or logo. All rights reserved. © 2021 Bloomberg.

20. BloombergNEF (BNEF) is a strategic
research provider covering global commodity
markets and the disruptive technologies
driving the transition to a low-carbon
economy.
Our expert coverage assesses pathways for
the power, transport, industry, buildings and
agriculture sectors to adapt to the energy
transition.
We help commodity trading, corporate
strategy, finance and policy professionals
navigate change and generate opportunities.
Client enquiries:
Bloomberg Terminal: press <Help> key twice
Email: support.bnef@bloomberg.net
Learn more:
about.bnef.com | @BloombergNEF
Albert Cheung