Renewable energy’s growth from 10% to 15% of the primary energy supply by 2035 is too slow to displace fossil fuels, highlighting the struggle for primary energy dominance, according to BP’s latest annual outlook. The energy major has raised its long-term oil and gas demand forecasts, confirming that the world is unlikely to achieve the 2050 net-zero target.
BP’s revised figures indicate a persistent reliance on hydrocarbons. Oil consumption in 2050 is now projected to hit 83 million barrels per day (b/d), an 8% increase from the previous 77 million b/d estimate. Natural gas demand is similarly forecast to remain elevated at 4,806 billion cubic meters annually in 2050. Furthermore, BP has delayed the expected date of peak oil demand by five years, now projecting 103 million b/d in 2030.
The primary reason for this slow transition is the overriding focus on national energy security, amplified by geopolitical factors. BP’s chief economist attributes the trend to the war in Ukraine, Middle East conflicts, and rising trade tariffs. This drive for self-sufficiency risks encouraging reliance on domestically produced fossil fuels, even as it creates an incentive for some countries to accelerate towards low-carbon ‘electrostates.’
The report warns that the current slow pace has severe climate implications. BP’s modeling shows that the world is on a trajectory to breach the cumulative 2∘C carbon budget limit by the early 2040s. The company cautions that this extended delay significantly increases the economic and social costs required for future climate mitigation. To meet the 2050 net-zero goal, oil demand must drop aggressively to about 35 million b/d by that date.
The slow growth in renewables is contrasted by oil’s sustained position as the largest single source of primary global energy supply, holding a 30% share in 2035. Renewables are not expected to surpass oil’s market share until the late 2040s, underscoring the deep inertia in the energy system that is preventing a rapid climate solution.