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).

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.

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.

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.

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.)

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.”
The post IEA reiterates ‘no new oil and gas needed’ if global warming is limited to 1.5C appeared first on Carbon Brief.
IEA reiterates ‘no new oil and gas needed’ if global warming is limited to 1.5C
Climate Change
Coles, Woolworths failing on deforestation commitments
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.”
Climate Change
New Zealand moves to protect business with law curtailing climate litigation
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.
The post New Zealand moves to protect business with law curtailing climate litigation appeared first on Climate Home News.
New Zealand moves to protect business with law curtailing climate litigation
Climate Change
Indonesia’s nickel production cuts are not enough to create a sustainable industry
Bhima Yudhistira Adhinegara is the Executive Director of the Center of Economic and Law Studies (CELIOS), an Indonesia-based economic think tank. Muhammad Zulfikar Rakhmat is the Director of the China-Indonesia desk at CELIOS.
Indonesia produces around 60% of the world’s nickel, a metal used to manufacture batteries for electric vehicles (EVs) – more than any other country in the world. But in 2026, the government sharply reduced how much of its nickel can be extracted from the ground.
Production quotas were reduced by around 40% this year compared to 2025. Weda Bay, the largest nickel mine on Earth, had its allowance cut by more than 70% and exhausted its full-year quota by the end of May, halting mining entirely; it cannot resume large-scale extraction until next year unless regulators grant an extension.
The policy has sparked a vivid debate in Indonesian policy circles: how can the country shift its strategy from a decade of mining vast quantities of cheap nickel to producing a high-value and low-carbon material that the rest of the world wants for EV batteries.
The cuts aren’t a silver bullet to clean up Indonesia’s nickel industry, whose smelters are powered by coal – the most polluting fossil fuels. But alongside stricter enforcement of environmental rules, it is one side of efforts to produce more sustainable nickel for a premium.
Restricting Indonesia’s nickel output
Production quotas were introduced to stop the collapse of nickel prices because of oversupply in the market. Prices had fallen more than 40% in 2023 alone and kept sliding as Indonesian supply kept growing, hitting a four-year low of around $13,900 a ton in late 2025.
Critics called the recent tightening of production quotas proof that Indonesia’s nickel strategy has failed, arguing that the industry shouldn’t need to throttle its own output to survive. But when assessed against what the policy was supposed to do – push up nickel prices – it has worked. Prices jumped to $20,000 a ton in May, the highest since 2024.
Chinese industry groups representing companies that have invested billions to mine and refine the country’s nickel were furious, warning Indonesia’s president Prabowo Subianto that the cuts put $50 billion worth of investment at risk. But much of that Chinese capital is sunk into smelters and processing plants built specifically to run on Indonesian ore, and cannot simply be moved elsewhere. That gives Jakarta more room to hold its ground than the warning suggests.
Stronger environmental enforcement
Since the start of the year, Indonesia’s forestry task force has seized more than four million hectares of land from mines and plantations operating illegally in protected forests, collecting over two trillion rupiah ($113 million) in fines.
This included 148 hectares seized from Weda Bay for lacking a forestry permit. The share of nickel produced from illegal small-scale mining also fell from about a quarter in 2022 to roughly 10% by 2024.
The crackdown responds to serious environmental damages in the nickel industry. On Obi Island, a waste pond collapsed after heavy rain in June 2025, flooding three villages and killing a resident. Internal company tests found chromium-6 – a carcinogen – in the water, in quantities far above the legal limit. The footprint of another mine near Raja Ampat, which is home to some of the world’s richest coral reefs, grew 60-fold in just eight years.

The market is responding to early cleanup efforts. Low-carbon nickel now sells for a real premium, roughly $18,800 to $19,300 a ton compared with $17,900 to $18,300 otherwise, as carmakers seek to source cleaner materials to comply with the European Union’s new emissions rules for imports.
In turn, this is incentivising the industry to do more to green its operations. Vale Indonesia’s smelter in South Sulawesi now runs almost entirely on hydropower, for example.
None of this addresses coal use, however. Major Indonesian nickel producers still emitted an estimated 15 million metric tons of greenhouse gases in 2023. Indonesia may be cracking down on illegal mining and rewarding cleaner producers but it is still running its mines on the dirtiest fuel available.
Unequal benefits
For Indonesia to truly benefit from producing cleaner and high-value nickel, it needs to reap the economic benefits too. Although the industry has boosted the country’s economic growth, the reality on the ground tells a different story.
Konawe in Southeast Sulawesi is home to a major smelting complex. Growth in the district jumped from 6% to 22% between 2015 and 2023, driven almost entirely by the nickel industry, according to a study by the Lowy Institute study. At the same time, poverty levels increased slightly and unemployment remained unchanged.
In Halmahera, another epicentre of the nickel industry, spending by the poorest fifth grew just 5% between 2019 and 2022, compared with 28% for the wealthiest fifth, according to a separate study.
Part of the reason for this inequality is the system for transferring mining royalties to district authorities where the mines are located. In theory, they are entitled to the largest share. But in practice, payments are delayed, companies routinely dispute what they owe and royalties are pooled and distributed across a larger area.
The Natural Resource Governance Institute has found that decentralisation handed local governments power to approve new mines faster than they could build their capacity to manage them. Higher output raises national income on paper, but local governments remain constrained by fiscal rules and infrastructure costs that scale with mining.
None of this makes the 2026 quota cuts a mistake. Indonesia has every right to defend its pricing power over a resource it controls. But limiting extraction isn’t going to fix underlying issues around environmental enforcement and revenue-sharing. That requires rules that are consistently enforced, royalties that reach communities living by the mines, and a plan to wean smelters off coal.
The post Indonesia’s nickel production cuts are not enough to create a sustainable industry appeared first on Climate Home News.
Indonesia’s nickel production cuts are not enough to create a sustainable industry
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