Natural gas is the only fossil fuel set to increase its share in the energy mix of the United States, China, and India by 2050, even as oil and coal usage decline globally, S&P Global Commodity Insights has predicted. The report says that scalability and commercial challenges are the biggest obstacles that will hinder a direct shift from coal to renewables, making natural gas a critical bridge in the global energy transition.
Fossil fuels continue to be the most dominant primary energy source across the globe despite the rapid growth of renewable energy. S&P Global has projected that renewables will supply 20% of global energy by 2050, up from just 4% currently. “By 2050, gas shall be the only fossil fuel with a potential increase in the energy mix for the US, China, and India,” the report stated.
The analysts note that coal-to-gas substitution has been driving the energy transition in the United States, Europe, and Southeast Asia while India has been lagging here. India’s energy mix remains heavily skewed towards fossil fuels, with oil and gas accounting for 77% of primary energy use while renewables contribute just 2%. However, S&P Global has predicted that fossil fuels’ share in India’s energy mix will fall to 66% by 2050, while renewables will rise to 16%. India will mainly use natural gas as a transition fuel during this period, as a more flexible and cleaner alternative to coal.
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The report notes that the Indian government is playing a significant role in the transition, “The category of ‘other energy sources’, essentially traditional biomass (cooking), is declining sharply–being replaced by LPG. Government schemes such as ‘PAHAL’ and targeted LPG subsidies have driven this shift, leading to a reduction from 38 per cent to 19 per cent with expected further decline,” it noted. PAHAL (Pratyaksh Hanstantrit Labh or Direct Benefit Transfer for LPG) is a scheme wherein the Indian government directly transfers LPG subsidies into users’ bank accounts.
Meanwhile, India’s National Green Hydrogen Mission aims to make India a global hub for green hydrogen by targeting 5 million metric tons (MMT) per annum production by 2030, fostering energy self-reliance, decarbonizing the economy, reducing fossil fuel imports, and creating jobs. Launched in 2023, the mission will support the development of the entire green hydrogen ecosystem, from production to storage and distribution, encouraging indigenous manufacturing and technological innovation to achieve significant economic and environmental benefits.
