Falling costs for batteries and renewable energy means demand for fossil fuels is expected to peak in the 2020s, according to the latest report from Carbon Tracker.

Demand for oil, gas and coal is also stalling due to emerging economies adopting renewable energy and the Paris Agreement driving government policy, the report said.

Kingsmill Bond, Carbon Tracker New Energy Strategist and author of the report, said: “The 2020s will be the decade of fossil fuel demand peaks, as one bastion after another is stormed and overwhelmed by the rising renewable tide.

“This will inevitably lead to trillions of dollars of stranded assets across the corporate sector and hit petro-states that fail to reinvent themselves.”

Financial fall-out

The report said that the impact of the switch to renewables will include:

● a systemic risk to financial markets as they seek to digest vast amounts of stranded fossil fuel assets;

● effects on companies that compose up to a quarter of equity indexes and debt markets, hitting banking, capital goods, transport and automotive sectors;

● and fossil fuel exporting countries suffering, including Russia, which is one of 12 countries where fossil fuel rents account for 10% or more of gross domestic product.

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