Future fuel demand scenarios

Scenarios looking at the energy transition required to achieve a low- or net zero-carbon economy, such as those published by the International Energy Agency and the UK Committee on Climate Change, show a marked reduction in demand for liquid hydrocarbons in the years ahead. Nonetheless, they also recognise the continued need for these products in some sectors, such as aviation, heavy goods vehicles and marine.

The early development of low-carbon fuel production would help achieve ambitious carbon abatement objectives, reducing the upheaval associated with the introduction of alternative technologies. This would make best use of significant existing infrastructure, whilst lowering carbon emissions in the short- and medium-term.

Low-carbon liquid fuels provided by the downstream oil sector could therefore be a key enabler in the transition to a low- or net zero-carbon economy.

With international, supranational and domestic government policies, as well technological developments, driving changes in the demand for petroleum products, UKPIA has looked at a number of different scenarios of what UK demand for the downstream oil products will look like in 2050.

IEA scenarios

The International Energy Agency's (IEA) 2018 World Energy Outlook scenarios demonstrate what petroleum demand might look like under either a UK-modified IEA 'New Policies' scenario (NPS) and IEA 'Sustainable Development' scenario (SDS), assuming in both that UK demand will continue to represent the same proportion as the EU-28 to 2050 and including lubricants and bitumen assuming the same levels of demand.

NPS - Provides a measured assessment of where today's policy frameworks and ambitions, together with the continued evolution of known technologies, might take the energy sector in the coming decades. 

SDS - Starts from selected key outcomes under the UN Sustainable Development Goals and works back to the present to see how they might be achieved - including delivering the 2015 Paris Agreement, achieving universal access to modern energy by 2030 and reducing air-pollution related premature deaths. 

ETI scenarios

The Energy Technologies Institute scenarios demonstrate what petroleum demand might look like under either the ETI 'Clockwork' scenario or 'Patchwork' scenario.

Clockwork - Based on the premise that well-coordinated, long-term investments will allow new energy infrastructure - such as nuclear, CCS plants and renewables - to be installed like clockwork.

Patchwork - Based on the premise that central government takes less of a central role in decarbonisation, which will instead be prompted by regional policies and actions taken by society and individuals.

Low-carbon pathways

In all of the scenarios above, even the most ambitious carbon reduction strategies foresee some levels of consumption of liquid hydrocarbons. Therefore, reducing the carbon intensity of those fuels - by developing low-carbon liquid fuels - will be essential in order to reach 'Net Zero' emissions by 2050.

Pathways to reduce the carbon intensity of liquid fuels can be addressed under 5 main categories:

1) Vehicle-efficiency enhancement - the future evolution of vehicle designs and internal combustion engines, optimised for efficient combustion of fuels designed for these engines.

2) Extraction of crude oil and refining into products - opportunities to improve energy and carbon efficiency, during both the extraction of crude oil (upstream) and refining (downstream).

3) Alternative low-carbon liquid fuels - exploring potential carbon reduction through the deployment of sustainable and low-carbon biofuels and synthetic fuels.

4) Improving the performance of petroleum based fuels - the modification of fuel properties to optimise these for the latest internal combustion engines.

5) Other technologies/options - such as on-board vehicle CCS technologies and possibly conversion or storage of the final carbon emissions at the tailpipe.

As an example, the carbon emissions associated with diesel and gasoline have been summarised in the diagram below produced by Concawe, which shows a high-level assessment for a C-segment passenger car: