The prospect of achieving global net-zero emissions by 2050 has significantly dimmed, according to BP’s latest annual energy outlook, which forecasts a “hardening reality” of sustained oil demand. The energy major has revised its long-term projections upward, a clear acknowledgment that the world is moving too slowly in its pivot away from fossil fuels.
BP’s new projections for oil consumption in 2050 have been substantially adjusted, now expected to reach 83 million barrels per day (b/d), an 8% increase from the previous estimate of 77 million b/d. The demand for natural gas is also forecast to remain stubbornly high, projected at 4,806 billion cubic meters annually in 2050. Furthermore, BP has delayed the expected date of peak oil demand by five years, now predicting a peak of 103 million b/d in 2030.
A primary catalyst for this sluggish transition is the renewed global focus on national energy security, driven by geopolitical turmoil. BP’s chief economist highlights that conflicts in Ukraine and the Middle East, along with rising trade tariffs, compel nations to favor domestic energy supplies. This focus risks increasing reliance on domestically produced fossil fuels, even as it creates an incentive for some nations to accelerate low-carbon ‘electrostates.’
The report warns of severe climate consequences if the current slow pace continues. BP’s modeling shows that cumulative carbon emissions are set to breach the critical 2∘C carbon budget limit by the early 2040s, significantly increasing the future economic and social costs of mitigation. To align with net-zero 2050, oil demand must see a radical and immediate decline, dropping to approximately 35 million b/d by that date.
Despite the necessary and rapid expansion of renewable energy capacity, oil is forecast to remain the single largest source of primary global energy supply, holding a 30% share in 2035. While renewables are growing from 10% to 15% of the primary energy supply by 2035, they are not expected to surpass oil’s market share until the late 2040s, illustrating the decade-long inertia in the energy system.