Oil supermajor ExxonMobil says that the world will fail to meet the Paris Agreement goal to keep global warming below 2 degrees Celsius by 2050.

According to the company’s latest annual Energy Outlook, energy-related CO2 emissions will peak at more than 34bn tonnes later this decade and then decline to 25bn tonnes in 2050. The fall by 2050 would be 26%.

The world’s ability to reduce emissions that much, even as the global economy grows by more than 100%, is a testament to the significant progress expected to be made, said Exxon.

Indeed, 2bn more people globally by 2050, up 25% from today, and higher living standards will lead to higher energy consumption, said Exxon.

But more is needed to hit the emission-reduction levels required to keep global temperature increases below 2°C, it said. The average of the Intergovernmental Panel on Climate Change’s ‘Lower 2°C’ scenarios requires emissions to fall to around 11bn tonnes by 2050.

"An energy transition is underway, but it is not yet happening at the scale or on the timetable required to achieve society’s net-zero ambitions," said the report.

Oil and natural gas will still meet 54% of the world’s energy needs in 2050, said the oil and gas company. “Fossil fuels remain the most effective way to produce the massive amounts of energy needed to create and support the manufacturing, commercial transportation and industrial sectors that drive modern economies,” said the report.

According to the report, wind and solar will provide 11% of the world’s energy supply in 2050, five times today’s contribution. Oil and gas’s hold on the market is despite other lower emission options, such as biofuels, carbon capture and storage (CCS), hydrogen and nuclear, which will also play important roles.

For the energy transition, three key drivers are available, all involving broad collaboration among governments, companies, universities and others, said the report.

First, continued public policy support. Incentives like those in the US’s Inflation Reduction Act (IRA) can provide the necessary catalyst to begin scaling up low-carbon solutions.  Permitting reform is needed to accelerate the deployment of these solutions, a factor recognised in the European Union’s NetZero Industry Act, said Exxon.

Other policy priorities include enhanced transparency so that market participants have sufficient time to adapt to changes, and a recognition of the importance of keeping supply matched with demand to help minimise economic hardships on consumers, said the oil and gas company.

Secondly, only two of the 55 technologies needed to reach net-zero emissions by 2050 are on track, said Exxon, citing the International Energy Agency (IEA).

An all-of-the-above approach to technology, where governments avoid picking winners and losers, will lead to the most cost-efficient solutions being produced in a timely manner.

Thirdly, governments across the world cannot afford to pay in perpetuity to reduce the amount of emissions needed to be removed or avoided. Ultimately, to achieve global emission-reduction goals, the world will need to move to widespread adoption of markets where society as a whole incentivises driving emissions down. Given the need to do more and do it faster at a lower cost, progress will need to occur in parallel, supported by policies that are technology-agnostic and incentivise all approaches equally. Multiple approaches, nurtured by public-private partnerships and cross-industry collaboration, will be needed, said the report.

ExxonMobil’s projections have proved accurate in the last. According to Bloomberg, an analysis of Exxon’s climate projections from 1977-2014 by researchers at the University of Miami found that the company’s scientists correctly forecast the amount of the rise in global temperatures linked to CO2 emissions.

Despite the accuracy of its Energy Outlooks, the company is facing dozens of lawsuits in the US and billions of dollars in potential damages. The lawsuits accuse it of downplaying the impacts of climate change on its business.