(Bloomberg) -- Global demand for fossil fuels such as gasoline and diesel could peak as early as in 2032 as the energy transition gathers pace, but dramatically lower oil consumption may still be a couple of decades away.
It won’t be before 2043 that the burning of refined products derived from crude falls below levels seen in 2019, according to IHS Markit Ltd. The projection doesn’t take into account the consumption of natural gas liquids, mostly used for plastic production.
The London-based consulting firm joins a growing list of energy forecasters calling for peak fossil fuel demand over the next decade as developed nations including the U.S. boost efforts to decarbonize their economies amid increased concerns about climate change. In July, BloombergNEF projected oil consumption peaking by 2033 and dropping below pre-pandemic levels by 2041.
The World’s Road Fuel Demand to Peak Years Earlier Than Expected
While the energy transition has accelerated since the beginning of the pandemic, the prospect of net-zero emissions and much lower oil demand remains outside IHS’s most likely scenario because of technological and political barriers, the firm said. That would require a push into electrification and green hydrogen that is “well beyond the current trajectory.”
IHS says global refining capacity should shrink by more than 3 million barrels a day through 2050, in addition to the 2.3 million barrels of capacity that has already been permanently shut during the pandemic.
©2021 Bloomberg L.P.