DNV: Oil Demand Will Halve by 2050

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PUBLISHED MAY 7, 2023 11:29 PM BY THE MARITIME EXECUTIVE

 

In its latest decarbonization outlook, class society DNV predicts that oil usage will halve by 2050, with high-efficiency electric cars and trucks cutting deeply into demand for petroleum. 

Electrification of road transport is the primary driver, where electricity will likely beat out e-fuels and biofuels on cost for passenger vehicles. Even long-haul trucking will likely see more electrification over the next thirty years, according to DNV CEO Remi Eriksen. 

Thanks to the ultra-high efficiency of battery-electric technology, plummeting demand for carbon-based fuels in road transport will lead to a 50 percent drop in the use of oil in the sector by 2050, predicts DNV.

"Direct electrification is by far the most efficient use of energy. What electrifies will be cheaper," said Eriksen. "And that is why road transport will almost completely transform in the space of a single generation."

Aviation and shipping, on the other hand, are exceptionally hard to electrify at scale. Battery-electric power will likely account for a minute fraction of the total energy requirements for these sectors by midcentury. 

This is where biofuels will have an edge. Advanced biofuel could have as much as a fifth of the energy market in the maritime sector by 2050 - assuming that an adequate supply of feedstock can be found. Sustainable biomass will be limited and will come at a cost; competition for feedstock is already "intense," according to DNV. 

The next leading candidates for alternative fuel for shipping are fuels made from clean electricity and water - that is, green hydrogen-based e-fuels like green ammonia and green methanol. These are attractive, and could make up as much as half of the fuel for shipping by mid-century, according to DNV. However, uptake will likely be limited for the next decade, except perhaps in Northern Europe, where there is a strong push from policymakers. 

"Everything that can be feasibly electrified should be electrified. Transport that cannot be electrified should be incentivized to switch to sustainable biofuel in the medium term before a hydrogen based fuel ecosystem can scale from national to regional, and then global," summed up Eriksen.