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IEA issue 10-point plan to cut oil demand – and promote Electric Vehicles and recycled plastics

Economic growth
By Paul Hodges on 20-Mar-2022

Europe and the USA are now in a ‘proxy war’ with Russia after its invasion of Ukraine. We can all hope that it ends quickly, without further bloodshed on both sides. But hope is not a strategy. And now the IEA, (the Western world’s energy watchdog), has issued the first of what may be a series of 10-Point Plans to cut oil demand.

The problem with wars is that they quickly assume a life of their own. Once the military are in charge – and they have to be, once war is declared – their focus is on winning.  If things don’t go well, they don’t therefore think of giving up. They simply demand more resources and increase the pressure.

Both Ukraine and Russia are already in this mode. The generals are in charge on the battlefield, and their political masters are busy organising reinforcements:

  • President Zelensky has been mobilising Western public opinion very effectively via his video calls with national Parliaments, and reinforcements are being supplied at an increasing rate
  • President Putin’s plan for a ‘blitzkrieg war’ which would be won in 3 days has failed, and so he is now mobilising reinforcement from Chechen and elsewhere

We should now expect the war to move into a second, more attritional, phase. In turn, the risks of a wider engagement will rise. Putin has, after all, already threatened the use of tactical nuclear weapons, and to target Western convoys taking weapons into Ukraine.

If this happened, then the pressure for NATO to enforce a “no-fly zone” in Ukraine would increase – and the risk of a direct military engagement between Russia and NATO forces.

We can, of course, all hope that peace talks will succeed. But the International Energy Agency is taking no chances, and calling for an immediate 2.7mbd saving in oil demand via the steps described in the chart:

  • Reducing speed limits (as in 1974 during the Arab Oil Boycott); working from home for up to 3 days/week; car-free Sundays in cities; encouraging use of public transport, walking and cycling
  • Restricting car use by 50% in cities, encouraging car-sharing; increased focus on driving efficiently (slower speeds, less braking, improved vehicle maintenance)
  • Using high-speed and night trains instead of planes; reducing business travel


The IEA also emphasises that the war highlights the need to move decisively away from the use of fossil fuels. Its plan to achieve Net Zero targets set out the direction of travel last May. Since then, OPEC+ decided to reduce output to support prices – which they have done very successfully.

So geopolitical, economic and sustainability goals are all pointing in the same direction as the IEA notes:

  • Governments need to accelerate the transition to Electric Vehicles and unblock supply chains – shortages of nickel and lithium, for example, need to be resolved via major investment. As does the battery charging infrastructure
  • They also need to prioritise a major increase in recycling capacity for plastic packaging, particularly for ‘single use’ packaging – which is already recognised as being critical from a waste perspective

These are difficult times, and there is no guarantee that they may not get worse. But they also remind us of the critical need to move beyond the Age of Oil, and develop more sustainable energy resources for the future.