The demand for fossil fuels could face an early peak due to the coronavirus pandemic, as developing economies are hit particularly hard by the virus, according to a report by energy giant BP published on Monday.
The pandemic is expected to have a “significant and persistent impact” on the global economy and energy systems, the company said in its annual BP Energy Outlook.
BP economists analysed different scenarios for global energy demand until 2050, forecasting a “fundamental shift” as fossil fuels are replaced by renewables and electricity consumption rises.
The economists expected economic activity to only partially recover over the next few years, with global gross domestic product (GDP) 2.5 per cent lower in 2025 compared to before the pandemic, and 3.5 per cent lower in 2050.
Emerging economies including India, Brazil and some African states were expected to be “most exposed,” while global behavioural changes such as working from home and decreased use of public transport could become permanent, BP said.
“Even as the pandemic has dramatically reduced global carbon emissions, the world remains on an unsustainable path,” said BP chief executive Bernard Looney.
“[But] with decisive policy measures and more low carbon choices from both companies and consumers, the energy transition still can be delivered,” Looney said.
According to the report, under a “business as usual” scenario in which governments continue with existing policies, emissions would only decline slightly.
A “rapid transition” would see a 70-percent fall in emissions by 2050, while a “net zero” scenario would see emissions fall by over 95 per cent amid “significant shifts” in demand.