Oil in the Sustainable Development Scenario

mb/d

2

1

0

- 1

- 2

Advanced

economies

China

India

Other developing economies

International

bunkers

Net change

mb/d

2

1

0

- 1

- 2

Cars

Trucks

Petrochemicals

Aviation and

shipping

Buildings

Power

Other

Net change

The headline difference in oil demand between the STEPS and the SDS is stark. While demand plateaus in the 2030s in STEPS, oil consumption is falling by around 2 mb/d each year by then in the SDS. Beneath the aggregate numbers, there are also significant variations across different segments of oil demand, depending on the ease with which oil can be substituted.

Passenger transport sees the most dramatic changes. Already in the STEPS, oil use in this segment is declining by the late 2020s but in the SDS, oil consumption for passenger transport plummets. By 2040 in this Scenario there are 900 million EVs (including electric cars, plug-in hybrids and fuel cell cars) on the road globally – around 50% of the global car fleet

– and most of the world’s urban buses are electric. There is also some modal shift from private vehicles to public transport, which means there are around 10% fewer cars on the road than in the STEPS in 2040.

Trucks have been one of the main sources of oil consumption growth in recent years, with demand rising by around 4 mb/d between 2000 and 2018. Global road freight activity nearly doubles between 2018 and

2040, with the expansion of online commerce boosting the amount of goods transportation undertaken by lighter vehicles (which are easier to electrify). In the SDS, there are enhanced efforts to decarbonise freight transport through systemic improvements in road freight operations and logistics, and a shift towards the use of alternative fuels and vehicles.

In the shipping sector, the optimisation of hull shapes, improvements in the efficiency of engines, air lubrication and wind assistance all help to curb overall energy use. There is also growth in the use of biofuels, electrification for some short-distance journeys, hydrogen along certain routes, and LNG (albeit to a limited extent). While the use of oil falls by

around 30% between 2018 and 2040 in the SDS, it still makes up 70% of fuel consumption in shipping in 2040.

In aviation, the two main opportunities to reduce oil use are efficiency and biofuels. Oil use falls by just under 20% between 2018 and 2040, while the use of biofuels expands rapidly: in 2040, biofuels account for around one-quarter of fuel use in aviation.

The only sector to see demand growth in the SDS is petrochemicals. The rate of plastics recycling more than doubles from around 15% today to 35% in 2040, but oil use as a petrochemical feedstock still increases by almost 3 mb/d to 2040 (IEA, 2018). The use of bio-based feedstock offers one potential alternative to oil demand, but this remains a niche industry even in the SDS. This is partly due to the considerable cost gap that bio-based processes need to close in order to be competitive, but also it is because bio-based processes compete with other sectors where bioenergy enjoys stronger policy support.

In Europe and in the advanced economies in the Asia Pacific region, more than 90% of car sales are electric in the SDS by 2040, and oil use in buildings is almost entirely eliminated. There is also a strong uptake of electric cars in the United States, although their share of new car sales is slightly lower (an average of around 50% during the 2030s), in part because of a preference for larger car sizes that are more difficult to electrify in full.

Oil use in petrochemicals in advanced economies falls by around 25% between 2018 and 2040. This occurs partly because of a shift in global refining and petrochemical activities towards emerging economies (which benefit from cheaper feedstock), and partly because of material efficiency improvements and enhanced recycling efforts that reduce the need for new plastic materials.

Oil demand continues to grow in some developing economies in the SDS.

In China, oil demand peaks in 2025, and in India it peaks around 2030.

But from 2030, oil demand is in decline across nearly all countries and regions; the only exception is some countries in sub-Saharan Africa, although growth there is relatively limited. In aggregate, oil demand in developing economies in 2040 is around 10% lower than today.

China is already a leader in electric mobility. There are over 25 million new passenger cars sold every year to 2040 and a rapidly expanding proportion of these are electric cars in the SDS (rising from 25% of sales in 2025 to over 90% by 2040). However, there is still an overall increase in oil use in passenger cars until around 2025. Oil use as a petrochemical feedstock also rises steadily in China between 2018 and 2040.

In India, there is a pronounced growth in passenger car sales from around

3 million in 2018 to over 16 million in 2040. Again, the proportion of electric cars sales expands rapidly in the SDS, and 90% of passenger car sales in 2040 are electric. Besides petrochemicals, there is also an increase in oil use in buildings in this scenario. LPG helps to provide clean cooking facilities to around 300 million people in rural locations in 2030 who would have otherwise relied on the traditional uses of biomass.

The population of sub-Saharan Africa grows by 70% between 2018 and 2040 and its economy almost triples in size; further, a key pillar of the SDS is that universal energy access is achieved by 2030. As a result, oil use grows across all sectors in sub-Saharan Africa over the period to 2040. Nonetheless, its per capita oil consumption in 2040 (0.6 barrels per person per year) remains only a fraction of the global average in this Scenario (2.7 barrels per person per year).

considerably higher. Nonetheless, this level of oil consumption in Africa in 2040 still brings a relatively high level of energy services because some possible uses for oil, such as heating, are not required and because there is a large potential for efficiency improvements.