Electricity decarbonisation has progressed in most OECD regions but methane emissions remain high and concentrated in a few regions
The transition to net zero calls for low-carbon electricity generation and more industrial electrification. In this context, regions with heavier industries face more challenges in increasing electrification, as these industries are more difficult to electrify than low-temperature heat processes (OECD, 2023).
The power sector is the main reason for the large drop in emissions across OECD countries, with a 24% decrease from 2010 to 2022. Almost 70% of OECD regions reduced their power sector emissions (Figure 3.17 and Figure 3.18). A drop in the share of electricity generated from coal (-14 percentage points, p.p.) and an increase from renewables (+11 p.p.) explains most of this decline. Out of 184 OECD regions, around 126 saw more electricity from low-carbon sources (Figure 3.13). The increase in low-carbon electricity generation was very substantial in some regions: for instance, in Alentejo, Portugal, it surged from 13% in 2017 to 65% in 2021. However, 55 OECD regions did see a reduction in low-carbon electricity generation, such as Pennsylvania in the United States, where it fell from 43% to 35%.
While electrification in industry is crucial for reaching net zero, it remains quite limited across OECD regions. Industry emits more GHG than any other sector in 3 of 10 OECD regions (129 out of 433). In 2021, electricity accounted for one-third of the final energy consumption of industry in OECD countries, varying from 19% in Latvia to 97% in Iceland. Data for 124 regions show that over half (68 regions) have an electrification rate lower than 20% (Figure 3.14). Differences within countries can be large. For instance, the industrial electrification rate in France varies from 19% in Provence-Alpes-Côte d’Azur to 72% in Corsica.
Fossil fuel operations are also a large source of methane emissions. In OECD countries, fossil fuel exploitation accounts for one-quarter of all methane emissions. Four OECD regions emerged as large methane emitters: Alberta, Canada, due to oil sands exploitation; North Dakota, New Mexico and Texas in the United States extracting oil and natural gas from the Williston and Permian Basins (Figure 3.15). In CO2-equivalent terms, the methane emissions due to fossil fuel exploitation in Texas in 2022 are equivalent to twice the total GHG emissions of Sweden. However, these emissions can be reduced cost-effectively (IEA, 2023).
Beyond emissions reduction, technological change will be key to accelerating change but adaptation and mitigation innovation remains concentrated across regions and countries. Denmark, Finland, Germany, Norway and Sweden record the highest number of patents in climate change adaptation and mitigation technologies per capita among OECD countries. In the past 5 years, Central Jutland, Denmark, recorded the highest number of climate patents per inhabitant, with more than 525 patents in climate change adaptation and mitigation technologies. Whereas large metropolitan regions recorded more than 3 times climate-related patents per million inhabitants compared to remote regions (70 versus 20 patents per million inhabitants), remote regions had a higher share of climate-related patents relative to total patents than large metropolitan regions (Figure 3.16).
