The delay in the global clean energy transition is pushing the world toward a critical climate threshold, with BP warning that the 2∘C carbon budget will be exceeded early. The energy major has significantly increased its long-term forecasts for oil and gas demand, a revision that solidifies the view that the 2050 net-zero goal is slipping out of reach.
BP’s annual outlook presents concerning figures for sustained fossil fuel use. The projection for oil consumption in 2050 has been raised by 8%, now expected to reach 83 million barrels per day (b/d), up from the prior 77 million b/d estimate. Natural gas demand also remains resilient, forecast at 4,806 billion cubic meters annually in 2050. Crucially, BP now forecasts peak oil demand five years later, in 2030, at 103 million b/d, extending the period of maximum global consumption.
The report attributes this sustained demand to the overriding need for national energy security, a priority intensified by geopolitical issues such as the war in Ukraine, Middle East conflicts, and trade tariffs. While this pressure for self-sufficiency could motivate some countries to accelerate domestic, low-carbon electrification to become ‘electrostates,’ BP cautions that it also creates a strong incentive to rely on domestically produced fossil fuels over potentially volatile imported energy.
The environmental implications of this slow transition are dire. BP’s modeling shows that on the current trajectory, cumulative carbon emissions will exhaust the critical 2∘C carbon budget limit by the early 2040s. The company stresses that this extended delay significantly increases the future economic and social costs associated with necessary climate mitigation. To meet the 2050 net-zero target, BP states that oil consumption must drop aggressively to about 35 million b/d by that date.
Despite rapid growth in renewables, they are not replacing fossil fuels quickly enough. Oil is forecast to remain the single largest source of primary global energy supply, holding a 30% share in 2035. While renewables are set to rise 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. This slow handover occurs amid BP’s own strategic shift toward ramping up oil and gas production following internal management and investor pressure.