Plans by China and India to adopt energy policies that will boost the use of electric vehicles (EVs) in the coming years have prompted the Paris-based International Energy Agency (IEA) to announce that it will review its long-term oil demand forecasts.
China is aiming for one-fifth of all car sales to be comprised of vehicles using alternative fuels by 2025, while India is looking at electrifying all new vehicles by 2032.
The IEA said the targets were ambitious and that it would adjust its projections for crude oil demand and EV use for the next issue of its World Energy Outlook 2017, which is due to be published in November. China and India currently consume 11% and 2% of global gasoline demand respectively. The World Energy Outlook 2016 forecast oil demand for vehicle use to rise until 2040.
PTI reported this week that a switch to EVs could save India US$60 billion in gasoline and diesel costs and cut carbon emissions by 1 gigatonne by 2030, based on a report carried out by NITI Aayog and the Rocky Mountain Institute. India would need to sell some 10 million EVs in 2030, as against the approximately 1.3 million EVs on the road globally in 2015. India now has around 5,000 EVs on the road.
“The exact formulation of the target and the extent of its long-term achievement … is a good step that will help India to be among the global leaders in deploying a technology that is crucial to [tempering] increasing oil import needs, local air pollution in cities, and [limiting] CO2 emissions,” the IEA said.
A major shift to EVs is expected to have a big impact on Asia’s gasoline market, and consequential effect on refineries as demand falls. More than a third of the world’s refineries are located in Asia, where demand for products has been driving global oil demand. China trails only the US in oil consumption, while India comes fourth and Japan third.
“The choices made by China and India are obviously most relevant for the possible future peak in passenger car oil demand,” Reuters quoted an IEA spokesman as saying.
CleanTecnica reported last week that China’s Guangzhou Automobile Group (GAC Group) had started building an EV production factory in Guangdong Province. The plant will cost US$700 million to build and have a capacity to produce 200,000 cars per year when it is complete at the end of 2018.