Penetration of Electric vehicles set to grow and reduce demand for oil worldwide

The penetration of electric vehicles (EV) is set to grow in the coming years and may reduce the growth in global oil demand, according to Rystad Energy at a seminar on India’s challenges to achieve energy security held recently at the Norwegian Embassy.

Rystad Energy is an independent oil and gas consulting service and business intelligence data firm offering global databases, strategy consulting and research products. The firm recently established offices in Bangalore.

According to the firm, the sales of light duty vehicles will constitute 40 percent of global growth in oil demand. If these sales are partly replaced by electrical vehicles, the demand for oil will be drastically reduced. Aviation, maritime sectors, petrochemicals, building and agriculture are also expected to drive the demand for oil going forward. However, the growth in demand driven by these sectors will not make up for the impact of electrical vehicles. In fact, a peak oil demand scenario could happen in the beginning of the 2030s.

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Rystad Energy also made the case that natural gas has an important part to play in India’s future energy mix. Considering the reduced greenhouse gas emissions from natural gas compared to coal, it could also play a crucial part in reaching the Indian pledge under the Paris Agreement.

Tripling the use of natural gas would reduce demand for coal by 25%. Increased renewable energy generation could also reduce coal demand by 25%. Together, these two factors could limit Indian emissions in 2021 to 3,1 gigatons of CO2, well within the limits of Carbon Tracker’s suggested country quota of 4 gigatons.

In Norway, government policies has led to a more EVs being sold. More than 29 percent of all new cars sold in Norway are now electric. The Norwegian policies include removing the sales tax which lowers the price, permission to drive in the bus land which shortens the time spent commuting to work and free parking privileges in city centers.

Meanwhile, the Indian government has set the target of all vehicles sold to be electric by 2030. If this ambitious goal is met, India will be in a good position to curb the growth in greenhouse gas emissions from the transport sector and reduce their dependence on foreign oil.

(Source: ANI)