According to the World Energy Outlook 2006, fossil fuels are expected to provide 81% of energy needs by 2030.

Meanwhile, global energy demand is expected to swell 53% by 2030 and send crude oil prices to more than $US100 a barrel unless governments manage to shift energy trends.

Nearly three-quarters of increased demand will come from China, India and other developing countries, the IEA said.

IEA executive director Claude Mandil said the energy picture had “changed appreciably” since the 2004 outlook, the last major update of the agency’s global energy projection.

“The realities of the energy market have become harsher and the relative competitive position of fuels has changed,” he said.

“Oil and gas prices this year have been between three and four times higher than in 2002 and this is reflected in a new oil price assumption for the projections.”

Mandill said WEO 2006 identifies under-investment in new energy supply as a real risk. To “quench the world’s thirst for energy”, he says the world needs to invest more than $20 trillion in energy-supply infrastructure over the next 25 years.

The report also found that China would overtake the United States as the world's largest emitter of greenhouse gases before 2010, with emissions forecast to more than double between 2004 and 2030.

Federal Industry Minister Ian Macfarlane and Environment Minister Ian Campbell and yesterday agreed that the report highlighted the need for a new Kyoto agreement.

“We clearly need a new Kyoto which has all countries pulling their weight to reduce greenhouse gas emissions,” Campbell said.

Macfarlane went further to say the report’s findings would “embarrass critics of the Howard Government’s energy policies”.

“These projections underline the shortcomings of Kyoto and vindicate the Howard Government’s commitment to supporting a broader more effective international agreement,” he said.

He reiterated that the Australian Government has committed $500 million to developing low emissions technologies, including cleaning up coal-fired power stations, and, through AP6, almost $60 million to supported technology transfer to developing countries to tackle emissions.

“This is on top of over $600 million in direct support for the renewable energy industry over the last decade,” he said.

The WEO 2006 report also found that biofuels could make a “significant contribution” to meeting future road-transport energy needs by accounting for 4% of fuel use by 2030.

But the IEA warned that rising food demand, which competes with biofuels for existing arable and pasture land, and the need for subsidy would constrain the long-term potential for biofuels production using current technology.