Fossil fuels offer fewer investment returns for companies than previously thought, according to a new study by researchers at the University of Leeds on Thursday.
"An evaluation of the global energy return on investment for fossil fuels and renewable sources reveals a much more level playing field than previously believed," according to the study.
Oil, coal and gas are typically calculated to have ratios above 25:1, meaning that "roughly one barrel of oil used yields 25 barrels to put back into the energy economy," the study shows.
The ratio is calculated when measured at the extraction stage, when oil, coal or gas is removed from the ground, which is the study describes as "misleading."
"These ratios do not take into account the energy required to transform oil, coal and gas into finished fuels such as petrol used in cars, or electricity used by households," the study said.
When factoring in the energy required to transform fossil fuels into end products, the researchers estimate the ratios are much closer to those of renewable energy sources, roughly 6:1, and potentially as low as 3:1 in the case of electricity.
For renewable energy sources, the return is estimated to be below 10:1, according to the researchers.
The researchers emphasize that these findings make a strong case for "rapidly stepping up investment in renewable energy sources and that the renewables transition may actually halt or reverse the decline in global estimated ratios for energy return on investment at the finished fuel stage."
By Zeynep Beyza Kilic