Why in news?

At its recent ministerial meeting in Paris, the International Energy Agency (IEA) acknowledged progress on India’s request for full membership. India is currently an associate member of the Paris-based body, which focuses on energy security, global energy policy, climate change, and energy transitions.

However, India’s bid for full membership is complex because the IEA’s founding legal framework allows only OECD countries to become members. Granting India membership would therefore require amendments to these rules, making the process challenging rather than automatic.

What’s in Today’s Article?

• The International Energy Agency (IEA): Origins and Role
• Expansion of IEA Membership
• Evolving Role of the IEA
• India’s Quest for Full IEA Membership
• IEA’s Support for India

The International Energy Agency (IEA): Origins and Role

• The IEA was established in 1974 in response to the global oil crisis triggered by the Arab oil embargo during the Yom Kippur War.
• The embargo led to soaring oil prices and fuel shortages, exposing the vulnerability of major industrial economies dependent on imported oil.
• In response, member countries of the Organisation for Economic Cooperation and Development (OECD) decided to collaborate to manage energy security and reduce dependence on imported oil. As a result, 17 OECD nations founded the IEA.
• Core Mandate and Emergency Mechanism
  • The IEA’s primary objective was to safeguard stable oil supplies and anticipate future disruptions through coordinated action.
  • A key feature of its framework is the requirement that each member maintain minimum strategic oil stocks to cushion supply shocks.
  • This emergency mechanism has been activated multiple times, including during the 1991 Gulf War and after Russia’s invasion of Ukraine in 2022.
• Membership Structure
  • Although more countries joined over time, full membership remained restricted to OECD members.
  • The IEA currently has 32 full members. At the recent ministerial meeting, Colombia became the 33rd member after joining the OECD in 2020, thereby qualifying for IEA membership.

Expansion of IEA Membership

• In 2015, the IEA allowed non-OECD countries to join as associate members.
• While they participate in policy discussions and activities, they do not have decision-making powers.
• India became an associate member in 2017, and there are currently 13 associate members.

Evolving Role of the IEA

• With diversification of energy sources, technological advances, and growing climate concerns, the IEA’s mandate has expanded beyond oil security.
• The agency now works extensively on renewable energy, decarbonisation, and energy transition.
• It has also recently launched a critical minerals programme, reflecting the changing energy landscape.
• Changing Global Energy Dynamics
  • Countries like China, India, and Brazil have emerged as major energy producers and consumers, reshaping global energy markets.
  • At its founding, IEA members accounted for over 60% of global energy demand.
  • This share fell to about 40% a decade ago despite more members joining.
  • However, including associate members such as India, China, Brazil, South Africa, Indonesia, Egypt, and Thailand, the broader IEA family now represents about 80% of global energy demand, highlighting its expanded global relevance.

India’s Quest for Full IEA Membership

• India has been pursuing full membership of the International Energy Agency (IEA) for several years and formally submitted its request in October 2023.
• The issue has also featured in India-US bilateral discussions.
• Why India Seeks Full Membership?
  • As an associate member, India participates in discussions but lacks voting rights. Full membership would give India a voice in IEA’s decision-making processes.
  • The IEA plays a crucial role not only in energy security and emergency response but also as a leading knowledge platform on energy transition, climate change, and clean technologies.
  • It maintains one of the world’s most comprehensive energy databases, increasing its global influence.
• Legal and Structural Hurdles
  • IEA membership is currently limited to OECD countries. Since India does not intend to join the OECD, granting it full membership would require:
    • Amending the IEA’s founding charter, or
    • Making a special exception.
  • Discussions indicate that a legal amendment may be considered. Brazil, another non-OECD country, has also sought full membership.

IEA’s Support for India

• The IEA has expressed strong support for India’s bid, highlighting:
  • India’s growing central role in global energy security.
  • Its expected leadership in inclusive energy transitions and climate action.
  • The projection that India will see the largest growth in energy demand over the next three decades.
• At the recent ministerial meeting, delegates welcomed progress in discussions following India’s request.
• Growing India-IEA Engagement
  • Expanded Cooperation - IEA’s engagement with India has deepened significantly, with multiple India-focused reports and data initiatives.
  • LiFE Initiative Collaboration - IEA prepared a special report on India’s LiFE (Lifestyle for Environment) initiative, estimating that widespread lifestyle changes could avoid up to 2 billion tonnes of global emissions by 2030.