British energy giant BP in its 2020 Energy Outlook projects the first fossil fuel demand fall in modern history as climate policies encourage wider adoption of renewable energy, while the coronavirus pandemic leaves a long-term impact on the world’s energy market. BP’s 2020 Energy Outlook includes three scenarios. The “Rapid” and “Net-Zero” scenarios predict that worldwide oil demand has already peaked. Meanwhile, the “Business-as-usual” scenario said global oil consumption would reach its peak by 2030.
The “Business-as-usual” scenario assumes the current policies, technologies, and social preferences that are expected to evolve at a similar pace over recent years. Under this scenario, the coronavirus is expected to reduce global oil demand by around 3 million bpd by 2025 and 2 million bpd by 2050. Oil demand is expected to be stagnant at around 100 million bpd through 2040 and fall to 95 million bpd around 2050.
The “Rapid” scenario assumes a quick transition, including climate policies that push down global carbon emissions by 70% by 2050. Meanwhile, the “net-zero” scenario assumes that the policies are reinforced further, resulting in a 90% fall in global carbon emissions by 2050. Under these scenarios, oil demand is expected to fall by about 50% and nearly 80% by 2050, respectively.
The three scenarios predict a decreasing share of fossil fuels in the global energy mix from 85% in 2018 to 20%-65% by 2050. In contrast, the shares of renewables are set to increase from 5% to 60% over the same period. Previously, fellow oil major Shell also predicted that the coronavirus pandemic could knock off up to 5 million bpd of oil demand by 2025.
