Energy transition boosts demand for natural gas to over 80% of demand

While concerns about greenhouse gas emissions and costs persist, natural gas is emerging as a major player in the global energy mix for decades to come. According to a recent report by Wood Mackenzie, this fossil fuel will remain essential for power generation, industrial processes and transport, playing a bridging role between coal, which is still dominant, and the fast-growing renewable energies.

The report reveals that demand for natural gas has risen by 80% over the last 25 years, and now accounts for almost a quarter of global energy consumption. Despite the rise in electrification and renewables, these alone will not be enough to meet the exponential growth in energy needs, particularly in Asia and Europe. "Natural gas offers unrivalled flexibility and reliability, as well as being a less polluting alternative to coal, which still covers 30% of the world's needs," points out Wood Mackenzie.

In South-East Asia, countries such as Vietnam, Indonesia, Malaysia and the Philippines are planning to add up to 180 GW of gas-fired power stations by 2050 to support their economic development. In China and India, demand is expected to grow by 95 billion cubic metres over the same period, offering a pragmatic solution to reduce dependence on coal. However, the high price of liquefied natural gas (LNG) is holding back its widespread adoption. Without a carbon tax of $100 per tonne, coal is likely to remain more competitive in many Asian markets.

Beyond its role in electricity generation, natural gas is paving the way for low-emission innovations. Carbon capture and storage (CCS) and blue hydrogen - produced from natural gas with CCS - are being highlighted as promising solutions. Given the still prohibitive cost of green hydrogen, blue hydrogen could reach a production capacity of 40 million tonnes by 2050, according to WoodMac projections. These technological advances position gas as a lever for accelerating decarbonisation.

Despite these advantages, natural gas remains controversial in the climate debate. Described as a "dirty word" because of its status as a fossil fuel and the methane emissions it produces throughout its supply chain, it faces major challenges in securing its future. The report stresses the need to reduce these emissions and promote alternatives such as biomethane or e-methane to maintain its relevance in a world aiming for carbon neutrality.

Wood Mackenzie calls on governments to adopt a balanced approach, reconciling net zero emissions targets with energy security. "If renewables and emerging technologies do not keep pace, gas will remain an unavoidable option," the report warns. A new wave of LNG supplies, expected as early as 2026, could also shake things up by making gas more affordable and consolidating its role as a transitional fuel.

Natural gas thus finds itself at a crossroads: a strategic pillar for meeting today's energy needs and a springboard for a greener future, it must nevertheless overcome its environmental and economic limitations. In a world seeking a balance between development and sustainability, its future will depend as much on technological advances as on future political choices. For Wood Mackenzie, one thing is clear: gas has not said its last word.