Oil consumption in particular rebounded strongly, largely on the back of China relaxing its zero-COVID lockdown policies. Although demand for gas remained relatively flat, consumption of crude oil broke through the 100 million barrels per day level for the first time ever and coal demand beat the previous year’s record level. Consumption of renewable energy grew at six times the rate of total primary energy and electricity grew 25% faster than total primary energy consumption.
Energy developments
• Total primary energy consumption increased by 2% over its 2022 level, 0.6% above its ten-year average and over 5% above its 2019 pre-COVID level.
• Renewables’ share of total primary energy consumption reached 14.6%, an increase of 0.4% over the previous year. Together with nuclear, they represented over 18% of total primary energy consumption.
• Fossil fuel consumption as a percentage of primary energy dropped 0.4% to 81.5%.
Carbon emissions
• Greenhouse gas emissions from energy use, industrial processes, flaring and methane (in carbon dioxide equivalent terms) increased 2.1% to exceed the record level set in 2022. For the first time ever, energy-related emissions exceeded the 40 GtCO2e level, with emissions from the direct use of energy breaching 35 GtCO2e for the first time ever..
• Carbon dioxide emissions from flaring increased by 7% along with emissions from methane and industrial processes that also increased by over 5%.
Oil
• Although Brent crude oil prices fell 18% to average $83/bbl in 2023, they were still some 29% above their 2019 pre-COVID levels.
• Global oil production increased by 1.8 million b/d to reach a record level of 96 million b/d in 2023. The US remained the largest producer seeing its output grow by over 8%. Overall production from non-OPEC+ countries exceeded global incremental demand growth by 20%.
• In 2022 the combined consumption of oil and biofuel products exceeded 100 million barrels per day for the first time ever. In 2023, consumption of oil products alone exceeded this level.
• Regionally, whilst North America witnessed a modest increase in oil consumption of around 0.8%, demand in Europe fell by nearly 1% to 13.9 million barrels per day. By contrast, the Asia Pacific region saw an increase of over 5% to 38 million barrels per day.
• The ending of China’s extended zero-COVID lockdown measures saw demand for gasoline and diesel rebound to 7,179 kbd, 15% above its 2019 pre-COVID levels. Whilst its demand for jet/kerosene grew by 74% in 2023 to 828 kbd, this is still 14% below its 2019 level which was a record year for China.
• China’s refining capacity (18,484 kb/d) exceeded the US (18,429 kb/d) for the first time ever making it the largest oil refining market by capacity. However, throughput of refined products from China still lags the US with an overall utilisation of 81.7% versus 86.6%.
Natural gas
• On average natural gas prices in Europe and Asia fell 30% from their record highs recorded in 2022, averaging around $13/mmBtu. US Henry Hub prices exhibited an even greater fall of 60% to average $2.5/mmBtu across the year, back to their 2019 pre-COVID level.
• Global gas production remained relatively constant compared to 2022. The US remains the largest producer of gas delivering around a quarter of the world’s supply. Output in Europe and the CIS fell by around 7% and 4% respectively. In absolute terms, the Russian Federation saw the largest fall in output with a 5% drop of 32 BCM.
• In 2023 LNG supply grew nearly 2% (10 bcm) to 549 bcm. The US overtook Qatar as the world’s largest exporter of LNG, seeing its supply increase nearly 10% versus a 2% drop from Qatar. The Russia Federation saw falls in both its LNG and pipeline exports with LNG dropping nearly 2% (0.8 bcm) and pipeline supplies dropping around 24% (30 bcm).
• Global natural gas demand increased by only 1 bcm in 2023, a rise of only 0.02% and only slightly above its 2019 pre-COVID level. Whilst its share of global fossil fuel consumption remained around the 29% mark, its share of total primary energy consumption fell 0.5% since 2019.
• The global growth in LNG demand was triggered primarily by the Asia Pacific region with China, India, and other non-OECD Asia Pacific countries demand increasing by 11 bcm, 2.6 bcm, and 7.6 bcm respectively. LNG into both Europe and OECD Asia Pacific countries fell by 3 bcm and 11 bcm respectively.
• China regained its position as the world’s largest LNG importing country followed by Japan and South Korea. Together, they accounted for around 45% of global LNG trade.
• Overall natural gas pipeline net trade fell by around 8% (or 35 bcm) in 2023. European pipeline imports fell by 26% (40 bcm), almost entirely attributable to supplies from Russia which accounted for 91% of the drop.
Coal
• From the record levels recorded in 2022, coal prices fell 46% on average with European delivered prices settling around $130/tonne and delivered prices in Asia averaging around $125/tonne.
• Global coal production reached its highest ever level (179 EJ), beating the previous high set the year before. The Asia Pacific region accounted for nearly 80% of global output with activity concentrated in just four countries, Australia, China, India, and Indonesia.
• Global coal consumption continued to increase and breached 164 EJ for the first time ever. The increase of 1.6% over 2022 was seven times higher than the previous ten-year average growth rate.
• Whilst China is by far the largest consumer of coal (it beat its own record set in 2022 and now accounts for 56% of the world’s total consumption), in 2023 India exceeded the combined consumption of Europe and North America for the first time ever. Coal consumption in both Europe and North America fell below 10 EJ each and has been in constant decline over the past 10 years.
Electricity
• Global electricity generation increased by 2.5% in 2023 to reach a record level of 29,925 TWh. Whilst electricity demand in Asia Pacific and the Middle East increased by around 5%, demand in both Europe and North America fell by 2.4% and 1% respectively.
• For fossil fuels, coal retained its position as the dominant fuel for power generation in 2023 with a stable share around 35%. Natural gas’ share of the generation fleet also remained stable at around 23%. Oil-fired plant contributed just over 2% of total electrical output.
• Renewables share of total power generation rose from 29% to 30%. At a regional level, Southern & Central America recorded the highest contribution from renewables at 72%. In Brazil, responsible for over 40% of electricity demand in the region, wind and solar increased by 17% and 71% respectively.
• The share of nuclear remained flat at around 9% with new build in China and returns to service of plant in France and Japan being offset by the closure of Germany’s remaining plant.
• In 2023, grid-scale battery electricity storage system (BESS) capacity stood at 55.7 GW, nearly 50% of which was installed in China.
Wind and Solar
• Solar and wind capacity continued to grow rapidly in 2023 beating the previous year’s record of 276 GW by around 186 GW, a 67% increase.
• Solar accounted for 75% (346 GW) of the capacity additions with China responsible for around a quarter of the growth. Europe installed just over 56 GW of solar, representing 16% of total solar capacity additions.
• Wind achieved a record year for new build with over 115 GW coming online. Nearly 66% of capacity additions were in China and its total installed capacity is now equal to North America and Europe combined. Although Europe has the highest share of offshore in its wind portfolio (12%), China has 37 GW compared to Europe’s 32 GW.
Biofuels
• Global biofuels’ production grew by over 8% in 2023 with the biggest increases seen in the US (75 mboe/d) and Brazil (65 mboe/d). Indonesia was responsible for around 46% of Asia Pacific region’s production of 422 mboe/d.
• The production split in 2024 was 54% biogasoline and 46% biodiesel.
• The US, Brazil, and Europe were responsible for around three-quarters of all biofuels consumed globally.
Key minerals
• Across the board, prices for key metals and materials fell by around 26% in 2023. The biggest declines were in cobalt (-47%), pet needle coke (-36%), and lithium carbonate (-32%). Prices for copper and natural graphite fell by only 4% and 15% respectively.
• Africa was responsible for nearly 75% of the world’s cobalt production. Within this, the Democratic Republic of Congo was responsible for around 96% (or 56% of the global total).
