Oil use in transport to fall 69% to hit UN climate pledge says Total

Quantum Commodity Intelligence – Demand for oil in transport would need to fall more than two-thirds by 2050 from 2021 levels to keep global warming close to UN-agreed goals, according to the latest energy outlook by French energy major TotalEnergies.

Total global liquid fuels demand, including oil, biofuels and e-fuels would need to decrease to 60 million barrels per day by the middle of the century from 2021's estimated 98 million bpd to keep global warming to 1.7-1.8 degrees Celsius by 2100, it said.

Oil would make up just 17% of all energy consumption under that scenario, down from 39% in 2021, including a fall in transport demand from 51.9 million bpd in 2021 to just 16.2 million bpd by 2050.

But that would require a "wide diffusion" of decarbonisation strategies from rich countries committed to net-zero targets to the faster-growing Global South, including electrification in transport, greater cuts to coal use, and more green hydrogen, biofuels and e-fuels.

"According to demographic forecasts, the world's population will increase by 1.7 billion between now and 2050 in the Global South... The challenge will be to reconcile the energy transition with this growth in the Global South," said the report released this week.

"This transition will not happen without rich countries supporting the Global South by promoting a just energy transition (through investment, technology transfer, training, etc)," it added.

The political onus has so far been on richer countries to bear the brunt of near-term carbon-cutting goals while developing countries are expected to continue to grow fossil fuel demand under a business-as-usual scenario as population grows and living standards catch up.

Electrification in transport has been one of the trickier rich-country GHG-cutting methods to sell to developing ones, due to the extensive costs of infrastructure, vehicle replacement and clean power supply.

Biofuels

But biofuel use has gained more headway in the Global South, since it substitutes directly for fossil fuels and can be transitioned gradually, while it is also often able to be produced locally, providing benefits in energy security and to the domestic agriculture sector.

According to Total, even with greater EV penetration globally, biofuels consumption in transport would grow from 3.9 million bpd in 2021 to 9.6 million bpd in 2050 while e-fuels would increase from practically zero to 9 million bpd by the middle of the century.

With battery and fuel cell electric vehicles accounting for 80% of energy use in light vehicles and electric and hydrogen both gaining significant shares for trucks, road transport would only use 31% of biofuels and e-fuels down from 99% currently.

Instead, aviation and maritime transport would use 35% each of the total estimated 18.6 million bpd demand for biofuels and e-fuels, which would see sustainable aviation fuel make up 65% of all aircraft fuel by 2050.

But the increase in demand for e-fuels, which are derived from clean hydrogen, poses extensive challenges in scaling up and becoming cheaper.

Making enough e-methanol to power all of the world's ocean-going vessels would require as much green electricity as the entire current output, clean and dirty, of the US, said Total.