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The world would not need to invest in new oil and gas projects if demand for the fuels fell in line with the 1.5C limit on global warming, says the International Energy Agency (IEA).

The agency has been under attack from the Trump administration in the US for saying that fossil-fuel use is on track to peak this decade, given current policies and firm political pledges.

But, in a new report, the agency reiterates its 2021 finding that no investment in new oil and gas would be needed in a 1.5C world, albeit with some caveats.

The report also sets out how the oil-and-gas industry has been needing to “run fast to stand still”, spending around $500bn per year just to keep output at today’s levels.

It says this is due to output falling faster than previously thought at the world’s oil and gas fields, with an increasing reliance on shale oil and gas projects that face rapid rates of decline.

Amid growing calls for further licensing in the North Sea, the IEA also notes that new exploration licenses take an average of nearly 20 years to deliver additional oil and gas production.

Turning unconventional

The IEA report begins by arguing that discussions on the future of oil and gas “tend to focus on the outlook for demand, with much less consideration given to how the supply picture could develop”.

This is why the IEA has published a report on the rate of decline at existing oil and gas fields, as well as looking at where these fuels come from today and how this might change in the future.

Over the past quarter-century, global oil supplies have risen by a third, as shown in the figure below. At the same time, the source of those supplies has shifted towards “unconventional” resources, such as “tight oil” from shale formations (red) and oil sands (orange).

Figure 1: Oil production by type and average annual change, 2000-2024
Left: Global oil output by type, million barrels per day (mb/d). Right: Average annual change. Credit: IEA.

Shale gas is also behind much of the growth in global gas production over the past 25 years, shown by the green wedge in the figure below.

Figure 6: Natural gas production by type and average annual change, 2000-2024
Left: Global gas output by type, billion cubic metres (bcm). Right: Average annual change. Credit: IEA.

Accelerating decline

The shift towards unconventional resources, such as shale oil and gas, means that the output from existing fields will decline ever-more steeply without continued investments.

Indeed, the IEA report shows that this is already the case, with global “decline rates” for both oil and gas getting steeper – and the trend set to accelerate – as shown in the figure below, for gas only.

Figure 39: Natural gas production under natural decline rates worldwide
Left: Historical global gas production, bcm, (light blue) and decline rates if there had been no further investment as of 1980, 1990 and so on. Right: Average annual loss of production with no further investment, by decade. Credit: IEA.

The consequence of these accelerating rates of decline is that the oil-and-gas industry is already needing to “run fast to stand still”, the IEA report explains.

It notes that nearly 90% of annual upstream investment in the sector since 2019 has been “dedicated to offsetting production declines rather than to meet demand growth”.

The industry needs to invest around $500bn per year, just to maintain current output, it says.

With investment set to reach $570bn in 2025, the IEA notes that this is enough to sustain “modest” production growth, but only a “small drop” away from flat or declining output.

The IEA also notes that around the world, on average, there is a delay of nearly 20 years from the issuing of oil and gas exploration licenses, until additional production starts to flow. It explains:

“This includes five years on average to discover the field, eight years to appraise and approve it for development, and six years to construct the necessary infrastructure and begin production.”

(In a recent speech pledging to “maximise extraction” of oil and gas from the North Sea, if elected, the UK’s opposition Conservative leader Kemi Badenoch talked of the need for new licenses.)

Need for new investment?

The IEA report goes on to show that without continued investment in maintaining output, global oil and gas production would plummet, as shown in the figure below.

Figure 37: Global oil and gas production with natural declines rates from 2025
Global oil (mb/d, left) and gas production (bcm, right) if upstream investment stopped. Credit: IEA.

The Financial Times said the IEA report illustrated the “costly battle” facing the oil-and-gas sector if it wants to maintain current output.

However, the newspaper added that the sector would likely welcome the findings:

“The IEA’s findings are likely to be greeted enthusiastically by the oil industry, which has consistently maintained that it needs to spend heavily to maintain its current production levels.”

The catch is that the report also spells out the implications of falling demand, in a world that limits warming to below 1.5C above pre-industrial levels.

In the 1.5C-compliant “NZE scenario”, the IEA says that a “huge acceleration in the pace of energy transitions relative to current trends” would see oil and gas demand falling dramatically.

It adds that if this drop in demand were to happen, then no investment in new oil and gas production would be needed, as shown in the figure below. Specifically, the IEA report says:

“The pace of demand reduction in the NZE [1.5C] scenario is therefore sufficiently rapid that, in aggregate, no new long lead-time conventional upstream projects would need to be approved for development.”

(The IEA says that even in this 1.5C-compliant “NZE scenario”, there would still need to be some investment in “existing and approved” projects, to balance decline rates.)

Figure 44: Global oil and natural gas demand in the NZE Scenario, and production with investment in existing and approved conventional projects, 2024-2050
Global oil and gas production in 2024 (grey bar) and in the future with no investment (light blue) and with investment in existing and approved projects (dark blue). Demand under the 1.5C-compliant “NZE scenario” is shown by the green circles. Credit: IEA.

The new report, thus, reiterates the IEA’s previous finding that no investment in new oil and gas would be needed if the world got onto a 1.5C path.

However, it puts the emphasis more firmly on the need for demand to decline, in order to eliminate the need for new investment, contrasting with the way this finding has been widely reported.

In its coverage of the 2021 finding, for example, the Guardian reported that oil and gas development “must stop…if the world is to stay within safe limits”.

On the contrary, the new IEA report says that investment in new oil-and-gas development will be needed to meet demand, unless demand is dramatically reduced in line with the 1.5C limit.

In addition to making this point more firmly, the IEA report notes that a swathe of the highest-cost oil and gas projects in the world would need to close early – effectively becoming stranded assets – if demand for the fuels declines in line with the 1.5C limit. It says:

“[T]o ensure a smooth balance between supply and demand, declines in demand in the NZE scenario would lead to the early closure of several higher cost projects before they reach the end of their technical lifetimes. In 2050, for example, around 8mb/d of oil production and 250bcm of gas production would be retired earlier than would be implied by observed decline rates.”

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Battle over cleaning up shipping set to resume at London talks

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The US is expected to resume its attempt to sink measures for a greener global shipping sector at closed-door talks between governments at the International Maritime Organization (IMO) in early September.

The US and oil-producing allies like Saudi Arabia want to weaken a proposed plan for cleaner fuels that aims to reduce planet-heating emissions from the industry, which relies heavily on dirty bunker fuels. Shipping currently represents 3% of global emissions.

Those that want a softer system are likely to back a Liberian proposal which expert analysis suggests would see emissions fall by only half at most by 2050, far short of the sector’s agreed climate goals.

After several years of debate, governments provisionally agreed in April 2025 on the “Net Zero Framework” (NZF), a series of emissions reduction targets for shipowners, backed up with financial rewards for meeting the targets and fees for missing them.

But in October 2025, after a high-profile intervention from US President Donald Trump and threats of sanctions and visa restrictions, the US convinced a majority of voting nations to postpone the adoption of the NZF for a year.

Ralph Regenvanu, climate minister for the Pacific nation of Vanuatu, called the delay “unacceptable” given the urgency of accelerating climate change.

After a round of low-profile talks in May, the first of three further sets of talks on how to clean up shipping will begin at the IMO’s riverside headquarters in London on Tuesday, culminating in a final public session in November.

Em Fenton, who follows the talks as senior director of climate diplomacy at Opportunity Green, an NGO focused on aviation and shipping, said governments should not be sidetracked by alternative proposals to the NZF, calling them “a distraction from a hard-fought multilateral compromise”.

“If countries want to deliver a just and fair maritime transition, there is really only one choice: back the NZF and stand together in solidarity against those who would tear it apart,” Fenton added.

Five proposals on the table

Governments will discuss five different proposals submitted in advance of next week’s meeting. The most ambitious of these is from the Pacific island nation of Tuvalu, which has proposed a levy on the entirety of a ship’s emissions rather than just those above a certain level, as the NZF envisions.

That had been the original demand of Pacific nations before the NZF was provisionally adopted in April 2025. At the time, Tuvalu’s transport minister Simon Kofe described the NZF as disappointing and not ambitious enough.

For this reason, six Pacific countries abstained in the vote on the NZF. While they supported the original plan for its adoption in October 2025, they have used the delay to push again for more ambition.

John Kautoke, advisor to a group of Pacific nations called 6PAC+, told Climate Home News that the NZF “cannot diminish its already inadequate ambition. If anything, the NZF must increase in ambition if we are going to renegotiate its parameters.”

    Analysis by the Institute of Marine Engineering, Science and Technology (IMarEST) suggests that, of the five proposals, only Tuvalu’s would meet the 2030 and 2040 emissions reduction targets for global shipping that were agreed by governments in 2023. Those were for cuts of 20% between 2008 and 2030, 70% by 2040 and then reaching net zero “by or around, i.e. close to 2050”.

    Despite this, the UK, Australia, Canada and South Africa have formally proposed that governments adopt the NZF, which won support in a 63-13 vote among governments at the April 2025 talks. Trump’s US walked out halfway through.

    According to IMarEst’s analysis, while the NZF proposal will not be enough to meet the industry’s targets, it will reduce emissions more cheaply than the Pacific proposal.

    A proposal by Brazil – which fought hard for the NZF last October – suggests tweaking the framework to make meeting targets easier in the short term and harder in the long term.

    While this compromise will make it more appealing to the owners of polluting ships and countries that support them, IMarEst estimates it would lead to higher cumulative emissions than either the NZF or Pacific proposals.

    The NZF stipulates that fees for high-polluting shipowners should be be put into a Net Zero Fund and used to promote clean shipping fuels and a fairer transition. The Brazilian proposal would delay raising and spending these funds by two years, from 2029 to 2031.

    Liberia’s proposal weakens emissions cuts

    The US and Saudi Arabia are likely to swing behind a new proposal from Liberia, whose government makes millions of dollars a year selling the right for shipowners to register their vessels in the small West African nation via a US-based company.

    This proposal would weaken the emissions reduction targets. IMarEst says it would cut the industry’s emissions at most by a half by 2050, falling far short of the target agreed in 2023 for international shipping to reach net zero “close to 2050”.

    It would also replace the NZF’s fees for missing targets with a carbon trading system. As a result, there would be no Net Zero Fund and therefore less money available to incentivise green fuels and make the transition more equitable for poorer nations.

    Pacific advisor Kautoke said that, as well as preventing shipping from reaching zero emissions by 2050, Liberia’s proposal would mean the Pacific “will not receive any support to deal with the disproportionately negative impacts created by the cost of the transition”.

    “We get a double blow if we adopt the Liberian proposal,” he warned. “We get all the cost of a transition without any support, and we have an industry that continues to burn fossil fuels to an unforeseen point.”

    Japanese proposal favours shipowners

    Japan has submitted a late proposal to amend the NZF so that shipowners have more control over how the fees they would pay for emitting above a set threshold are spent.

    University College London professor Tristan Smith has argued that this change means there will be no central mechanism to incentivise investments in clean fuels. He wrote on LinkedIn that under the system put forward by Japan, shipowners would be able to select which green projects their fees would go to. They could choose their own or those of a sister company or other shipowners, rather than funding broader just transition projects that would benefit marine workers or developing countries hit by rising shipping costs.

    Despite its flaws, Smith added that Japan’s proposal “could still get taken seriously by some, given how appealing it may seem to shipowners who have consistently demanded control of revenues, and given how the US and other member states have pushed back against the IMO Net Zero Fund and [greenhouse gas] pricing.”

    Tacit or explicit approval?

    Next week, governments are expected to make statements saying which proposals – or which aspects of proposals – they prefer. Another set of talks will be held from November 23-27 before a potentially final round from November 30-December 4.

    A new framework to tackle shipping emissions could be adopted at those talks if two-thirds of countries that are present and signed up to a regulation called Marpol Annex VI – endorsed by just over 100 states – vote in favour of it, as they did in April 2025.

    The US and its allies are also trying to change the rules to make the next stage more difficult. Decisions that have been adopted at IMO meetings usually take effect automatically unless a certain number of countries object within a certain time period decided by governments, a system known as tacit approval.

    But the US wants that to require explicit approval instead, so that any new emissions standard would not come into force unless enough governments – representing a certain percentage of the world’s shipping fleet – actively indicate support for it.

    Critics say this change would give a small number of countries with large shipping registries the power to block implementation. Liberia has the world’s biggest shipping registry, run by an American company, followed by Panama and the Republic of the Marshall Islands.

    Liberia and Panama have supported the US at the talks on the Net Zero Framework. The Marshall Islands has long been one of the most vocal supporters of climate action in shipping but, with its officials and shipping registry income vulnerable to US retaliation, did not sign on to the recent Pacific proposal vowing to strengthen the NZF if it is re-opened.

    Brazilian negotiator Adriana de Medeiros Gabinio warned in April that the NZF’s opponents are trying to change the rules by which it comes into force as a “safety net to block” it.

    The post Battle over cleaning up shipping set to resume at London talks appeared first on Climate Home News.

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    Coles, Woolworths failing on deforestation commitments 

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    SYDNEY, Wednesday 26 August 2026 — New 2026 Sustainability Reports released by supermarket giants Coles and Woolworths this week demonstrate the retailers are failing on their commitments to end deforestation in their supply chains.

    Adele Chasson, Nature Policy Lead at Greenpeace Australia Pacific said:

    “These so-called sustainability reports are revealing. Despite their public commitments in 2024 and 2025, neither Coles nor Woolworths have taken deforestation-linked beef off their shelves. Meanwhile, bulldozers continue to tear up forests and bushland, pushing wildlife closer to extinction and causing mass toxic runoff to flow into the Great Barrier Reef. Millions of native animals like koalas are losing their homes to beef pastures each year, while the big supermarkets put off action.

    “Australians would be shocked to know that beef on the shelves of our biggest supermarkets could be pushing threatened species to the brink of extinction. Collectively Coles and Woolworths have made more than $2 billion in profits in the last year, profiting from the destruction of wildlife and precious Australian nature. Coles and Woolworths owe it to shoppers to deliver on their promises and end deforestation in their supply chains now.

    “As big beef buyers, Coles and Woolworths have an essential role to play in keeping Australia’s unique forests standing. They can help stop the Great Barrier Reef from being poisoned by runoff and protect iconic forest wildlife by taking deforestation off their shelves. It’s time these big companies put their money where their mouths are and follow through on their promise of sourcing and supplying deforestation-free beef.”

    Coles, Woolworths failing on deforestation commitments 

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    New Zealand moves to protect business with law curtailing climate litigation

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    New Zealand’s parliament has adopted a controversial new law blocking a whole avenue of climate litigation and shutting down its most advanced corporate lawsuit, which has been blamed by the government for shaking business confidence and investment.

    The Climate Change Response (Tort Liability) Amendment Bill, expected to take effect in the coming days after it is formally signed by the Governor-General, prevents all current and future civil claims for climate loss or harm under tort law.

    Justice minister Paul Goldsmith said last week that the aim was to give businesses “certainty around their climate change obligations”, noting it would not alter the government’s responsibilities under the Climate Change Response Act 2002 nor business obligations under the Emissions Trading Scheme.

    “Our response to climate change is best managed by the Government at a national level and not through piece-meal litigation in the courts,” he added in a statement.

    Such litigation, he said, “risks developing a new regime that contradicts the framework Parliament has already enacted” to tackle climate change.

      Goldsmith singled out a key domestic climate lawsuit brought by Northland iwi leader and activist Mike Smith against six big companies: dairy firms Fonterra and Dairy Holdings, energy firms Genesis Energy and Z Energy, New Zealand Steel and coal mining firm BT Mining. A seventh original defendant, Channel Infrastructure, was dropped after it permanently decommissioned its Marsden Point oil refinery.

      Smith argued that these companies had caused him harm under public nuisance and negligence law, as well as a third breach of a duty to cease contributing to climate change that has yet to be tested domestically. He did not seek financial compensation, instead asking for the companies to immediately stop emitting or contributing to net greenhouse gas emissions.

      In one of the most advanced corporate climate accountability lawsuits in the world, a trial had been scheduled for April 2027 after the Supreme Court unanimously allowed the case to continue.

      Corporate lobbying in the shadows

      Smith described the passing of the bill as “deeply concerning”, particularly as it coincided with the Supreme Court hearing another of his climate lawsuits. In that case, Smith v Attorney-General, he argues that the government’s response to climate change and its impacts on Māori communities in particular breaches rights to life and culture.

      “That timing raises profound questions about the separation of powers and the rule of law,” said Smith. “Whatever one’s view of the merits of these cases, it is deeply troubling when parliament intervenes to remove a legal pathway while the courts are actively considering fundamental questions about climate responsibility, rights and the crown’s obligations.”

      The bill – which says that no person (including the government) can be found liable in tort for emissions-related climate change effects – followed major lobbying efforts by the companies defending themselves in Smith’s lawsuit. They outlined a proposed legal amendment in a briefing note to the government in 2024.

      The centre-right government has been fiercely criticised over its lack of transparency in relation to this lobbying activity. The national ombudsman recently found that the Prime Minister’s Office effectively withheld information requested by the Environmental Law Initiative about meetings, discussions and conversations regarding Smith’s case.

      Green groups fail to stop bill

      The bill sparked huge concern among environmental campaigners in New Zealand and elsewhere. Greenpeace Aotearoa called it a “shocking abuse of executive power” and the vast majority of submissions to a parliamentary inquiry said it should be rejected.

      But in the end, it was adopted with little resistance, moving relatively smoothly through parliament, passing its third reading by 67 votes to 53. Sam Bookman, climate law lecturer at Melbourne Law School, told Climate Home News he was not surprised by this, given that the coalition government has a secure majority.

      A complaint has been made to the UN special rapporteur on climate change and human rights by Smith, the National Iwi Chairs Forum Pou Tikanga and youth coalition Climate Clinic Aotearoa over what they see as the government’s heavy-handed approach. Smith is also challenging the new law in yet another lawsuit.

      “Pathetic”: New Zealand plans to barely cut emissions between 2030 and 2035

      Bookman thinks it “very unlikely” that such a challenge will succeed, noting that New Zealand’s constitution is firmly anchored in parliamentary sovereignty.

      But the expert in climate law does not see the bill as the end of legal action in the country, noting that New Zealand has a “sophisticated climate litigation landscape with a growing number of specialist and experienced lawyers and NGOs”.

      The country is also approaching its next general election in November, and some opposition parties have pledged to restore access to the courts if elected.

      Amanda Larsson, global project lead on agriculture for Greenpeace International, said: “This law deserves to be tested, and I strongly encourage the international climate litigation community to unite and help defend New Zealanders’ fundamental right to hold polluters accountable before this becomes a global blueprint.”

      Copycat legislation on the rise

      New Zealand’s move is part of a small but growing legislative effort to shut down climate litigation around the world.

      In the US, Republican politicians introduced legislation in the House and Senate in April that would shield fossil fuel firms from climate liability lawsuits. Similar laws have already been passed at state level in Tennessee, Utah, Iowa and Louisiana.

      The German state of Bavaria has put forward a similar proposal to the Federal Council, aiming to block private climate claims as well as the recognition and enforcement of foreign judgments imposing such liability. There are also proposals to limit available remedies and actions in the Netherlands and Belgium.

      UN General Assembly backs “climate obligations” set by world’s top court

      Bookman said he expects more efforts to counter climate damages litigation and advised plaintiffs to think about how to respond, including drawing on broader support in opposing them.

      “Even though it’s very hard for plaintiffs to win these types of cases, companies are very eager to avoid the expense, embarrassment and political accountability that come even with unsuccessful lawsuits,” he said.

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