Natural gas now accounts for about a quarter of global electricity generation. While in the medium term it is seen playing a major role supporting a transition to net zero energy systems, its longer-term use is uncertain in a world dominated by non-emitting renewable energies.


Key findings

Daily European month-ahead and Asian spot LNG prices, January - April 2022


The Russian invasion of Ukraine created unprecedented uncertainty and volatility for both European and Asian gas markets

European short-term prices have reached all-time record highs since the beginning of the conflict as Europe became the premium market this past winter and attracted massive LNG flows to compensate for the sharp decline in Russian pipeline deliveries. LNG diversions to Europe were key to balancing winter consumption. The competition for flexible LNG cargoes pushed Asian spot prices to a record high and led to further curtailment in price-sensitive importing markets, particularly in emerging Asia. Price volatility also reached record levels as a result of unprecedented uncertainty.

Gas-fired generation in the Net Zero Scenario, 2010-2040


Natural gas-fired power generation is expected to increase 1% in 2021

Natural gas-fired power generation contracted 2% in 2020 but is expected to increase 1% in 2021. At about 6 300 TWh, gas fuelled 24% of total global power generation in 2020. In the Net Zero Emissions by 2050 Scenario, unabated gas-fired generation continues its growth in the short term, displacing coal-fired generation, but starts falling by 2030 and is 90% lower by 2040 compared to 2020. Increasingly, existing gas-fired power plants will need to be retrofitted with CCUS or co-fired with low-carbon fuels such as hydrogen to be consistent with Net Zero Scenario levels.

Upstream flaring CO2 emissions by region in the Net Zero Scenario, 1985-2030


Flaring emissions must drop rapidly to get on track with the IEA's Net Zero Emissions by 2050 Scenario

Globally, 142 bcm of natural gas was flared in 2020 – roughly equivalent to the natural gas demand of Central and South America. This resulted in around 265 Mt CO2, nearly 8 Mt of methane (240 Mt CO2-eq) and black soot and other GHGs being directly emitted into the atmosphere. Five countries (Russia, Iraq, Iran, the United States and Algeria) accounted for more than half of all volumes flared globally in 2020.

Many options are available to reduce flaring, but they will likely require new gas monetisation strategies, business models, and more stringent (and enforced) regulations. An increasing number of companies is committing to eliminate flaring by 2030. The Net-Zero Emissions by 2050 Scenario requires all non-emergency flaring to be eliminated globally by 2030, resulting in a 90% reduction in flared volumes by 2030.

Gas data explorer

Our work

Created in 2013, the GOTCP brings together representatives from governments, industry and academia in a global dialogue to explore the role of oil and gas technology in the energy transition. GOTCP aims to catalyse innovation across oil and gas technologies and to provide collaborative opportunities for enhancing national capabilities within both onshore and offshore activities.