The World Energy Council (WEC) expects that transport fuel demand in the next 40 years will come mainly from developing countries such as China and India, where demand will grow by 200% to 300%. In contrast, the transport fuel demand for the developed countries will drop by up to 20%, mainly due to increased efficiencies. The demand of the developing countries is expected to surpass that of the developed countries by the year 2025.
The report also says that oil may still fuel more than 80% of the global transport sector for the next 40 years due to strong demand growth from the heavy duty sector, shipping and air traffic. By 2050, WEC projects that global fuel demand in all transport modes could increase by 30% to 82%, compared to 2010 levels. The dramatic increase was revealed in a study presented by the WEC at the World Petroleum Congress in Doha, Qatar.
The study describes potential developments in global transport fuels and technology systems on the basis of two distinct scenarios: Freeway and Tollway. The Freeway scenario envisages a world where pure market forces prevail to create a climate for open global competition and solutions which are driven by lowest cost and the private sector. The Tollway scenario describes a more regulated world where governments decide to intervene in markets to promote early adoption of alternative technology solutions and invest in public transport infrastructure putting common interests at the forefront.
It is evident that the transport sector is about to go through a radical change, said Karl Rose, director of policy and scenarios at the World Energy Council. The light duty vehicle sector in OECD countries will be almost completely transformed in terms of fuel mix and we will see a pronounced shift of demand for transport fuels to the developing countries. The effect of the penetration of new technologies seems to be less profound than many have predicted, mainly due to the exceptional growth in heavy transport demand.
Our study reveals a particularly strong rise in demand for diesel, fuel oil and jet fuel which together constitute the bulk of transport market fuels, said Ayed Al-Qahtani, a senior project manager for WEC. By 2050, the demand for these three fuels could increase by between 10% and 68%; diesel alone will grow by between 46% and 200%, while jet fuel will grow by 200% to 300%. This has potentially significant implications for refiners and the downstream sector as a whole, especially in Europe which traditionally has a larger focus on diesel fuels.
The consequences for the environment are significant. In 2010, the CO2 emissions from the transport sector were about 23% of global CO2 emission levels and emissions from cars were about 41% of total transport emissions. With the higher levels of transport demand in 2050, depending on the fuel mix, total CO2 emissions from the transportation sector are expected to increase between 16% (Tollway) and 79% (Freeway), depending entirely on the degree of governments intervention in the transport markets and the success in advancing low carbon fuel systems.
WEC concludes that the biggest challenge is for governments to provide sustainable transport for nine billion people in 2050, and to do it at the lowest possible social cost (with minimum possible congestion, pollution, and noise generated by additional traffic and freight volumes). HP