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LONDON (Alliance News) - Oil major BP PLC on Thursday is expecting oil demand to continue to grow, with a demand for plastic products the main driver.
In its 2019 energy outlook to 2040, BP predicts demand for oil will grow in the first half of the outlook period before then flattening out, while BP expects coal consumption to remain broadly flat.
"Across all the scenarios considered in the outlook, significant levels of continued investment in new oil will be required to meet oil demand in 2040," said BP.
Oil demand will mostly be driven to 2040 by the use of non-combusted liquid fuels in industry, particularly in petrochemicals, driven by demand for plastic.
"Given the heightening environmental concerns regarding single-use plastics, the outlook also
considers a single-use plastics ban scenario, in which the regulation of plastics is tightened even
more quickly, culminating in a worldwide ban on the use of all single-use plastics from 2040 onwards," said BP.
A ban on plastics would cause oil demand to rise more slowly by 2040, though demand will also be dictated by what materials are used instead of practice.
"A ban on single-use plastics could result in an increase in energy demand and carbon emissions without further advances in alternative materials and the widespread use of collection and reuse systems," FTSE 100 BP said.
BP said global energy demand is set to rise by around a third by 2040, driven by improvements in living standards in Asia, especially in India and China.
Industry will account for around 75% of this increase, BP expects, but transport demand will fall sharply as vehicle efficiency improves.
BP said the power sector is the single biggest source of carbon emissions, and it is therefore "critical" the world keeps looking at reducing emissions from this sector.
"Policies aimed at the power sector are central to achieving a material reduction in carbon emissions over the next 20 years...most of the low-hanging fruit in terms of reducing carbon emissions is outside of the transport sector," said Spencer Dale, BP's chief economist.
BP expects global carbon emissions will keep rising, meaning a need to a much more comprehensive set of policy measures to cut emissions.
BP Chief Executive Bob Dudley said: "The outlook again brings into sharp focus just how fast the world's energy systems are changing, and how the dual challenge of more energy with fewer emissions is framing the future.
"Meeting this challenge will undoubtedly require many forms of energy to play a role. Predicting how this energy transition will evolve is a vast, complex challenge," Dudley continued.
"In BP, we know the outcome that's needed, but we don't know the exact path the transition will take. Our strategy offers us the flexibility and agility we need to meet this uncertainty head on."
"The world of energy is changing," added Dale.
"Renewables and natural gas together account for the great majority of the growth in primary energy. In our evolving transition scenario, 85% of new energy is lower carbon."
