BP has published its Energy Outlook for 2018, in which it considers the forces shaping the global energy transition out to 2040. A range of scenarios is considered, with the evolving transition (ET) scenario assuming that government policies, technologies, and societal preferences evolve in a manner and speed similar to the recent past. Under this scenario, world GDP more than doubles by 2040, driven by prosperity in developing nations. Fast growth in Asia is expected to drive global energy demand a third higher, although it will be partly offset by an improvement in energy intensity (energy use per unit of GDP). However, it should be noted that global energy demand growth is still significantly slower than seen in the past 25 years. Growth in energy demand from vehicles is expected to be lower than in the past, while demand from industry grows. Oil consumption will grow i over much of the outlook period before flattening in the later years. Fuel demand for road transport will be affected by the use of electric cars, shared mobility, and autonomy.
In terms of energy sources, renewables will grow at the fastest pace and will provide 40% of the increase in energy. China and the OECD countries are seen as leading the way on renewables. China’s coal consumption is expected to decline, with less than a quarter of its industrial energy demand being met by coal in 2040. These are some of the factors that will result in the global energy mix being the most diverse the world has ever seen by 2040, with oil, gas, coal, and non-fossil fuels each contributing around 25%.
The EU continues to lead the transition towards a low-carbon economy with EU carbon emissions per unit of GDP expected to be almost half the world average by 2040. However, indications are that, while the growth in global carbon emissions will slow markedly, the overall level will still be above that necessary to achieve the Paris climate goals. Speaking of the need for more downward pressure on carbon emissions, Bob Dudley, BP’s Group Chief Executive, said: “In BP, we continue to believe that carbon pricing must be a key element of any such approach as it provides incentives for everyone – producers and consumers alike – to play their part”.
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