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China leads transition that may slash growth in global oil demand by 70%. LONDON/NEW YORK, November 20 -...Read More
"This is a simple choice between growing dependency on what has been expensive oil produced by a foreign cartel, or domestic electricity produced by renewable sources whose prices fall over time. Emerging market importers will bring the oil era to an end.” Kingsmill Bond, Carbon Tracker energy strategist and report lead author.
“A switch to EVs in emerging markets would see oil importers alone cut growth in global oil demand by over 70%. Factor in the war on plastics hitting petchem demand and rising EV penetration in developed markets, it becomes ever more likely that we have seen peak oil demand in 2019.” Kingsmill Bond, Carbon Tracker energy strategist and report lead author.
Falling battery prices and the electrification of transport systems in emerging markets will reduce dependency on oil imports and decimate demand for oil.
Emerging markets are now facing a choice between importing expensive oil at rising prices and growing dependency, or domestic electricity, produced by renewable sources with prices falling over time.
Oil demand is highly problematic
Emerging market oil importers spend 2% of GDP on oil imports, have a high and rising dependency on imported oil, and suffer premature deaths of 285,000 people a year from pollution linked to transport.
Greening transport gives solutions
The electrification of transport and falling battery prices enable electric vehicles to compete directly on purchase price with ICE vehicles whilst reducing the cost of energy imports per vehicle by at least 90%, cutting the number of premature deaths from air pollution linked to transport by at least 75%, and lowering the cost to consumers by at least two thirds.
The emerging market transport leapfrog
China is leading the way in electric vehicles. In 2019, EV made up 59% of bus sales and 61% of 2-wheeler sales.
Elsewhere, markets are poised to follow. The Indian government targets 30% of car sales to be EV by 2030 and early adoption sectors like 2-wheelers are taking off from India to Vietnam.
An emerging market transport leapfrog would reduce expected 2030 demand by over 70% in a Business As Usual scenario. Factor in the war on plastics, and it becomes ever more likely that oil demand has already peaked.