ExxonMobil has released its Global Outlook report, which outlines energy demand and supply dynamics through 2050, determines potential impacts of government climate policies, and outlines strategies for emissions reductions in the energy sector.
The report forecasts energy demand across 15 sectors and matches this demand with around 20 types of energy. By starting with hypothetical future outcomes for the energy sector, the company analyzes an energy future needed to meet population growth of over 2 billion people and an 85% increase in global GDP per capita by 2050. Based on these projections, global energy demand is projected to rise 15% by 2050, with developing nations expected to grow at twice the rate of developed countries.
In meeting this demand, the world’s energy mix between now and 2050 is expected to see significant increases in solar and wind energy and major reductions in coal use. The report also emphasizes that, based on current trends, oil and natural gas are still projected to make up more than half of the world’s energy supply.
“Oil use is expected to decline significantly in personal transportation but will remain essential for the industrial processes and heavy-duty transport like shipping, long-haul trucking, and aviation that underpin economic growth,” said the report. “Consider: If every new passenger car sold in the world in 2035 were an electric vehicle, oil demand in 2050 would still be 85 million barrels per day, the same as it was around 2010.”
Both the heavy industry sector and heavy-duty transportation have made steps towards decarbonization, including lower reliance on fossil fuels like oil and gas.
For instance, the aviation sector has invested more heavily in sustainable aviation fuel (SAF) development in recent years. Heavy industry has also analyzed what it would take for the sector to reach net-zero emissions. However, the speed of these clean energy developments remains largely unknown — the International Energy Agency acknowledges that at present, society is not on a net-zero pathway, and unprecedented energy efficiency gains would be needed to decrease reliance on oil and gas.
Emissions Reduction Strategies for Hard-to-Decarbonize Sectors, Expected Drivers of Energy Transition
ExxonMobil’s report projects that despite advancements in renewables and improvements in energy efficiency, emissions will likely peak at 34 billion metric tons in this decade, then decline to about 25 billion metric tons in 2050. In order to keep global temperatures below 2 degrees Celsius, emissions will need to fall by about 11 billion metric tons by 2050. ExxonMobil suggests three scalable technologies to help in making these reductions: carbon capture and storage (CSS), use of hydrogen fuel, and use of biofuels.
In order to support the energy transition needed to meet international net-zero ambitions, the report emphasizes the need for continued public policy support to incentivize clean energy.
The report also suggests an “all-of-the-above” approach to technological advances that would provide the most cost-efficient, timely solutions. Finally, the company named market-driven solutions as key to emissions reductions, putting more responsibility on markets as a whole to incentivize emissions reductions rather than governments alone.