LONDON (ICIS)--By 2030, the main source of demand for oil will be from the petrochemicals industry, according to BP’s latest Energy Outlook published on Wednesday.
According to the outlook, the transport sector will continue to dominate global oil demand between now and 2040, accounting for more than half of the overall growth.
However, the outlook continues to say that, after 2030, “the main source of growth in the demand for oil is from non-combusted uses, particularly as a feedstock for petrochemicals”.
It goes on to say that non-combusted use of fuels will grow at almost twice the rate of other industrial uses, with oil accounting for two-thirds of the growth, with natural gas providing much of the remainder.
BP warned, however, that this growth will be increasingly affected by “environmental pressures on the use of some products, particularly single-use plastics and packaging”, meaning growth is dampened relative to past trends.
Meanwhile, by 2040, renewables will be the fastest growing fuel source in the world, growing five-fold to account for over 50% of the increase in global power generation and to provide around 14% of primary energy.
“This strong growth is enabled by the increasing competitiveness of wind and solar,” the report said.
“China is the largest source of growth, adding more renewable energy than the entire OECD combined, with India becoming the second-largest source of growth by 2030.”
Late in 2017, BP re-entered the renewable energy industry by investing $200m for a 43% stake in European solar energy firm Lightsource, six years after it sold off all of its solar assets.
Coming just 24 hours after the Singaporean government stepped up its fight against carbon emissions, BP’s Energy Outlook says they are set to rise by 10% by 2040, which, while slower than the rates over the past 25 years, is “higher than the sharp decline thought to be necessary to achieve the Paris commitments”.
Meanwhile, all the growth in energy consumption will be in the fast-growing developing economies, with China and India accounting for half of the growth in global energy demand to 2040.
Both India and China’s growth will slow throughout the stated period, however, India’s slowdown will be less pronounced, leading to it overtaking China as the world’s fastest growing market for energy by the early 2030s.
From 2035 to 2040, Africa will also contribute more to global demand growth than China.
“BP’s strategy has to be resilient and adaptable to significant changes in the energy industry,” said chief executive Bob Dudley.
“This Outlook considers the possible implications of some of these changes and helps inform our long-term planning. We cannot predict where these changes will take us, but we can use this knowledge to get fit and ready to play our role in meeting the energy needs of tomorrow.”
Elsewhere, Spencer Dale, the company’s chief economist, said: “We are seeing growing competition between different energy sources, driven by abundant energy supplies, and continued improvements in energy efficiency. As the world learns to do more with less, demand for energy will be met by the most diverse fuels mix we have ever seen.”