FirstFT: ‘The beginning of the end’ of fossil fuels

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The world is at “the beginning of the end” of the fossil fuel era, according to the International Energy Agency, which for the first time has forecast that demand for oil, natural gas and coal will all peak before 2030.

The energy watchdog forecast that the consumption of the three major fossil fuels will start to decline this decade because of the rapid growth of renewable energy and the spread of electric vehicles.

“We are witnessing the beginning of the end of the fossil fuel era and we have to prepare ourselves for the next era,” said IEA head Fatih Birol. “It shows that climate policies do work.”

Governments across the world have increased investments in renewables in response to climate change and the energy crisis stoked by Russia’s invasion of Ukraine, but many have faced a backlash over the expense during a cost of living crisis.

The IEA’s projections are due to be published next month in the body’s World Energy Outlook.

Related: In an op-ed for the Financial Times, Birol hailed a “historic turning point” but called on policymakers to do more to speed up the energy transition and reduce emissions.

Here’s what else I’m keeping tabs on today:

SEC: Gary Gensler, chair of the US Securities and Exchange Commission, will testify before the Senate banking committee for an annual oversight hearing as the SEC faces legal challenges from the financial sector as it pursues ambitious reforms.
Apple: The tech giant launches the iPhone 15 as it seeks to topple Samsung as the world’s smartphone leader.
Congress: Congress returns to session after its summer break as major fights over spending brew, with Republicans calling for the US to reign it in. A government shutdown looms, with its funding set to run out on September 30 without the approval of appropriations bills or a temporary stop-gap, known as a continuing resolution, to continue negotiations.

Five more top stories

1. Norway’s $1.4tn sovereign wealth fund has become the biggest shareholder in UBS. Norges Bank Investment Management increased its stake to more than 5 per cent this month, overtaking Dodge & Cox and BlackRock to become the biggest investor. The move comes as UBS executives are under pressure to convince investors of the benefits of its $3.4bn takeover of rival Credit Suisse.

2. Borrowers in the $10tn US corporate bond market are opting for short-term debt in a bet that soaring borrowing costs are unlikely to last. Corporate bonds issued so far in 2023 have come with an average 10 years to maturity — the lowest figure in a decade, according to data from LSEG that spans high- and low-grade debt. The shortened maturities underscore how companies are adapting their funding strategies to an era of high rates.

3. The US is moving ahead on a prisoner swap deal with Iran. The White House asked congress on Monday to release $6bn in frozen Iranian funds and has also said it will release five Iranian nationals held in US prisons. In return, Iran will release five American citizens imprisoned in the country. The deal could bring progress to long-stalled nuclear talks with Tehran.

4. Ukraine is prepared to make “additional amendments” to rules on minority languages to unlock EU accession talks, its deputy prime minister Olga Stefanishyna told the FT. Stefanishyna, who is in charge of Ukraine’s drive to join the bloc, insists on a balance with teaching in Ukrainian. The language issue has become Kyiv’s biggest potential obstacle to start formal membership talks with the EU.

5. JPMorgan Chase chief executive Jamie Dimon has criticised US regulators over recent proposals for new capital rules, warning they risk making bank stocks uninvestable and will result in borrowers having to pay more for loans. At issue are proposals outlined in July by the Federal Reserve’s Basel III endgame reforms requiring lenders to hold an extra $2 of capital for every $100 of risk-weighted assets.

Visual story

Generative artificial intelligence exists because of transformer models that can recognise and predict repeating motifs and patterns. The technology underpins a host of cutting-edge AI applications, and in this visual story, we explore how it works and what else it can help generate.

We’re also reading and listening to . . .

Beyond Reaganism: Today’s Republicans are willing to criticise the decisions of the private sector, a far cry for the same party under Ronald Reagan.
US Republican megadonors: Unsatisfied by the party’s presidential candidate line-up, some billionaire backers are waiting for their anti-Donald Trump champion.
Money Clinic 🎧: At the recent FT Weekend Festival in London, a panel of experts gave tips on how to ask for a pay increase.

Graphics of the day

China is set to eclipse Japan as the world’s largest exporter of cars. But the impressive export data hides a domestic market where demand has peaked for traditional combustion engines and consumers are buying far fewer cars, leading to an excessive oversupply.

Take a break from the news

Lake Khovsgol is located in one of the most remote regions of Mongolia and is roughly 136km long. At -12C, it might seem like the last place you would want to visit. But Tim Moore travels for 13 hours to see the lake, and then cycles across it.

Additional contributions from Grace Ramos and Benjamin Wilhelm