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5.1 Introduction
The chapter examines selected regions and countries which together account for nearly 90%
of global GDP, population and energy demand. It highlights the specific issues and dynamics
that affect them, taking account of their very different specific circumstances and ambitions.
Starting points for the analysis vary widely and depend on a host of factors that include
population, urbanisation, per capita income, economic structure, availability of natural
resources and geography. Each section includes some common elements that describe the
overarching trajectories for energy and emissions, key findings and the main factors that help
to explain them. Each section also provides insights on one or two topical issues that highlight
distinctive aspects of the projections. Table 5.1 highlights key indicators for the selected
countries and regions.
Table 5.1 ⊳ Key economic and energy indicators by region/country, 2022
Population
(million)
Total energy
supply
(EJ)
Electricity
demand
(kWh per capita)
Cars per
thousand
people
CO2
emissions
(Gt)
CO2
emissions
(t per capita)
United States 336 94 12 133 682 4.7 14
Latin America and
the Caribbean
658 37 2 253 137 1.7 3
European Union 449 56 5 521 557 2.7 6
Africa 1 425 36 508 25 1.4 1
Middle East 265 36 4 190 175 2.1 8
Eurasia 238 42 5 051 193 2.4 10
China 1 420 160 5 612 201 12.1 9
India 1 417 42 926 31 2.6 2
Japan and Korea 177 29 8 703 490 1.7 9
Southeast Asia 679 30 1 592 63 1.7 3
Note: EJ = exajoules; kWh = kilowatt-hours; Gt = gigatonnes; t = tonnes.
Notes to key energy and emissions trends across regions
Each section in this chapter has a key trends figure that shows trajectories for oil, natural gas
and coal primary energy demand, electricity supply, investment and carbon dioxide (CO2)
emissions. In all figures, the STEPS outlook for a particular sector or technology is shown
more prominently in a darker colour, with the lighter area representing the remaining
contribution of other sectors or technologies. Investment data are presented in real terms in
year-2022 US dollars (USD) converted at market exchange rates.
CO2 emissions refer to net energy-related carbon dioxide emissions. Common units and
acronyms used in the figures include: mb/d = million barrels per day; Mt = million tonnes;
Mtce = million tonnes of coal equivalent; bcm = billion cubic metres; GW = gigawatts; GWh
= gigawatt-hours; TWh = terawatt-hours; EJ = exajoules; Gt CO2 = gigatonnes of carbon
dioxide; PV = photovoltaics.
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5.2 United States
5.2.1 Key energy and emissions trends
Figure 5.1 ⊳ Key trends in the United States, 2010-2050
IEA. CC BY 4.0.
The United States has mobilised unprecedented levels of government support to boost clean
energy and reduce greenhouse gas (GHG) emissions (Table 5.2). The principal legislative
vehicles are the Bipartisan Infrastructure Investment and Jobs Act of 2021, which invests
around USD 190 billion for clean energy and mass transit, and the US Inflation Reduction Act
of 2022, which provides an estimated USD 370 billion in funding to promote energy security
and combat climate change. In the STEPS, these and other initiatives result in a reduction of
nearly 40% in CO2 emissions by 2030, relative to the 2005 level (Figure 5.1).
The largest impact of the increased government support is in the power sector, followed by
transport and industry. In the STEPS, CO2 emissions in 2030 in the power sector are 50%
lower than today. This is largely the result of tax credits that accelerate the deployment of
solar photovoltaics (PV) and wind. The reduction in emissions also reflects support for
lifetime extensions of nuclear power plants, as well as batteries and carbon capture,
utilisation and storage (CCUS) technology. In the transport sector, tax credits for electric cars
and investment in charging infrastructure lead to annual sales of electric cars rising from
1 million in 2022 and 1.6 million in 2023 to close to 8 million in 2030, by which they account
500
1 000
2010 2050
STEPS APS
Investment (billion USD)
Clean energy
500
1 000
2010 2050
Natural gas demand (bcm)
Buildings
10
20
2010 2050
Oil demand (mb/d)
Transport
400
800
2010 2050
Coal demand (Mtce)
Industry
5 000
10 000
2010 2050
Electricity generation (TWh)
Solar PV
3
6
2010 2050
CO2 emissions (Gt CO2)
Power
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for 50% of new car registrations. Technologies that aid emissions reductions in hard-to-abate
industrial sectors, such as CCUS and low-emissions hydrogen, are eligible for substantial tax
credits, which can lay the foundation for strong growth in the years ahead. By attracting
private capital, these incentives collectively support a doubling in clean energy investment
in the United States by 2030 over 2022 levels. There is also a notable increase in cross-cutting
investment in technology innovation.
These investments further accelerate reductions in demand for coal, which faces increasingly
strong competition from renewables and natural gas. In the STEPS, coal demand falls by
almost three-quarters by 2030 relative to the current level, largely thanks to solar PV and
wind increasing their share of electricity generation. Natural gas demand is higher than the
level in 2022 for several years, but peaks in the mid-2020s and then begins to decline, mostly
as a result of lower demand in the power and buildings sectors. Oil demand falls by nearly
2 million barrels per day (mb/d) by 2030 from around 18 mb/d today, largely due to rising
electric vehicle (EV) sales and fuel economy improvements.
Table 5.2 ⊳ Key policy initiatives in the United States
Policy Description
Inflation Reduction Act • Commits nearly USD 370 billion for energy security and climate change.
Bipartisan Infrastructure
Investment and Jobs Act
• Commits around USD 550 billion in total federal investment, including
around USD 190 billion for clean energy and mass transit infrastructure.
Methane Emissions
Reduction Action Plan
• Focuses on cutting methane emissions from the largest sources, including oil
and natural gas production, landfills and the agricultural sector.
Updated Nationally
Determined Contribution
• Aiming to reduce GHG emissions by 50‐52% by 2030 from 2005 levels.
• National target to reach net zero GHG emissions by 2050.
State-level clean
electricity targets
• 100% carbon‐free electricity or energy targets by 2050 in 22 states plus
Puerto Rico and Washington DC.
Fuel economy standards • Requirements to improve by 8% per year for light-duty vehicles for model
years 2024‐2025 and by 10% for model year 2026 relative to 2021 levels.
Zero emissions vehicles
(ZEV) targets
• California ZEV mandate for cars beginning in 2026 and rising to 100% of sales
in 2035 (Advanced Clean Cars II). Other states have adopted this mandate.
• California regulations to boost the deployment of medium- and heavy-duty
ZEVs (Advanced Clean Trucks). Other states followed the same example.
Exports of oil and gas from the United States are set to pick up in the coming years, in part
because of lower export volumes from Russia (notably for natural gas). In the STEPS, the
United States maintains its status as the world’s largest natural gas exporter through to 2030.
Liquefied natural gas (LNG) exports from the United States increase by 75% from 2022 levels
to reach 185 billion cubic metres (bcm) by 2030, of which 95 bcm is transported to the
European Union. Efforts to reduce methane emissions, along with efficiency and fuel
switching policies, increase the availability and value proposition of US oil and gas exports.
The updated Nationally Determined Contribution (NDC) of the United States shows a
substantial increase in ambition to 2030 in line with its pledge to reach net zero emissions by
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2050. Its commitment to reduce GHG emissions by 50-52% in 2030 from 2005 levels requires
continuing efforts to accelerate deployment of renewables and other low-emissions
technologies. Scaling up batteries and other forms of storage will also be important, as well
as action to modernise, digitalise and expand grids in a timely manner.
5.2.2 How much have the US Inflation Reduction Act and other recent
policies changed the picture for clean energy transitions?
The Inflation Reduction Act, the Bipartisan Infrastructure Investment and Jobs Act and other
recent policies have reshaped the US energy outlook. Targeting a broad set of technologies
across many sectors, the incentives now available are making clean energy investment more
attractive, prompting faster deployment of clean energy technologies and the development
of new clean energy manufacturing capacities in the United States. Our updated assessment
in the STEPS clearly demonstrates the significant impact of these policies when compared to
the outlook prior to these policies in the Stated Policies Scenario from the World Energy
Outlook-2021 (hereinafter referenced as WEO-2021 STEPS) (IEA, 2021).
Clean energy deployment and CO2 emissions
Figure 5.2 ⊳ Clean energy technology growth and energy-related
CO2 emissions in the United States in the STEPS
IEA. CC BY 4.0.
The Inflation Reduction Act spurs clean energy technology deployment
and accelerates the pace of CO2 emissions reductions
The Inflation Reduction Act and other recent policies have significantly improved the outlook
for a host of clean energy technologies. Electric vehicle sales in 2030 are projected in this
World Energy Outlook (WEO-2023) STEPS to be 13-times the 2021 level, compared with just
a threefold increase in WEO-2021 STEPS (Figure 5.2). Carbon capture projects completed by
2030 in the STEPS, including those under construction, are set to capture three-times the
volume of CO2 emissions as in 2021, double the increase projected prior to the Inflation
1
2
3
4
5
6
2010 2050
Transport Industry Buildings
Power Other
Energy-related CO₂ emissions
GtCO₂
WEO-2021 STEPS
5 10 15
Wind installed
capacity
Solar PV installed
capacity
Low-emissions
hydrogen production
Electric vehicle sales
WEO-2023 WEO-2021
Clean technology growth, 2021-2030
Index (2021 = 1)
STEPS:
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Reduction Act, while low-emissions hydrogen is now expected to gain much more than the
modest foothold projected in the WEO-2021. Wind and solar PV have also benefited
significantly from the support now available for clean energy technologies. As a result of
these changes, energy-related CO2 emissions decline to 3.6 gigatonnes (Gt) by 2030 in the
STEPS, 10% below the level in 2030 projected in the WEO-2021 STEPS. The power sector
accounts for most of the difference, followed by transport and industry, but all sectors make
a contribution. The accelerated progress made by 2030 also paves the way for more rapid
progress in succeeding years: emissions in 2050 are now projected to be one-third below the
level expected before the Inflation Reduction Act came into force.
Figure 5.3 ⊳ Electricity generation from selected sources in the United States
in the STEPS, 2022 and 2030
IEA. CC BY 4.0.
The Inflation Reduction Act accelerates deployment of solar PV and wind, supports
nuclear lifetime extensions and leads to an 80% reduction in unabated coal power by 2030
In the power sector, the boost provided by the Inflation Reduction Act for both existing and
new low-emissions sources of electricity accelerates the transition away from coal-fired
generation and reduces CO2 emissions. If all the conditions are met to receive the maximum
available tax credits for solar and wind, then the levelised cost to consumers of new solar PV
and wind in the United States is expected to be lower than anywhere else in the world. These
incentives are attracting private investors. By 2030, solar PV output surpasses 800 terawatthours
(TWh) in the STEPS (two-thirds above the level projected in WEO-2021 STEPS) and
wind reaches 1 000 TWh (almost 50% above the level in the WEO-2021 STEPS) (Figure 5.3).
Tax credits in the Inflation Reduction Act also support lifetime extensions of nuclear power
plants, which are one of the cheapest sources of low-emissions electricity. As a result of these
various incentives, unabated coal-fired power falls by about 80% in the STEPS, compared
with about 50% in the WEO-2021 STEPS. Unabated natural gas-fired generation also declines
by more than projected prior to the Inflation Reduction Act.
400
800
1 200
1 600
2 000
Solar
PV
Wind Nuclear Coal Natural
gas
2022
WEO-2023
WEO-2021
Low-emissions sources Unabated fossil fuels
TWh
2030 STEPS:
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Clean energy manufacturing
In recent years, clean energy manufacturing has been insufficient to meet domestic needs in
the United States. For example, in 2022, the domestic content of wind turbine blades and
hubs was about half and only one-third of solar PV modules were produced domestically.
While imports of clean energy components will continue, and would benefit from more
supply diversity, the Inflation Reduction Act provides significant incentives to boost domestic
clean energy manufacturing in the interests of maximising the domestic benefits of the
transition to clean energy and of national security. These incentives have resulted in a
number of announcements from companies looking to develop new clean energy
manufacturing capabilities in the United States, including plans for the production of
hydrogen, batteries, solar PV and wind turbines (Table 5.3). The United States has witnessed
a surge in announcements of large manufacturing facilities over the past year. Gigafactory
capacity, expected to remain operational until 2030, increased from 750 gigawatt-hours
(GWh) in July 2022 to 1.2 TWh by September 2023, due in large part to the support in the
Inflation Reduction Act (Benchmark Minerals Intelligence, 2023).
Table 5.3 ⊳ New announcements for clean energy technology
manufacturing in the United States
Technology Description
Hydrogen
production
• Aim to reach over 5.5 Mt of hydrogen by 2030 (mainly coupled with CCUS).
• Top-five projects account for around half of the capacity target. The largest project would
produce 1 Mt of hydrogen per year and be online in 2028.
Batteries • Aim for production capacity of 1.2 TWh by 2030, about 12-times the current level.
• Top-five projects account for one-third of the capacity target. Tesla alone has announced
260 GWh production capacity by 2030.
Solar PV • Exceeding 40 GW production capacity for solar modules by 2030, up from 7 GW today.
Wind • 1.5 GW production capacity of offshore nacelles by the end of this decade.
Sources: IEA analysis based on BNEF (2023a, 2023b), Wood Mackenzie (2023), SPV Market Research (2023)
and Benchmark Minerals Intelligence (2023).
An increase in manufacturing capacities will help the United States to create more resilient
supply chains for clean energy technologies, though these will inevitably take time to
develop. Around USD 150 billion in planned investment has been announced so far for key
technologies, including batteries, EVs, charging infrastructure, offshore wind, and solar (US
Department of Energy, 2023). With these investments, the United States is likely to be able
to meet all or most of its domestic needs for hydrogen electrolysers, EV and stationary
battery deployment by 2030. However, even with a sixfold increase in solar PV module
manufacturing, the United States would still only produce about 10% of what is needed for
2030 deployment in the STEPS. The figure for wind is even lower, and there have been few
announcements so far about planned increases in domestic manufacturing capacity for wind
power components. Ensuring resilient and diverse international supply chains is therefore
going to remain important as clean energy deployment ramps up.
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