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bp Energy Outlook

2023 edition

3 | bp Energy Outlook: 2023 edition

2 |

Energy Outlook

2023 explores

the key trends

and uncertainties

surrounding the

energy transition.

Energy Outlook 2023 is focused on three main scenarios: Accelerated,

Net Zero and New Momentum. These scenarios are not predictions

of what is likely to happen or what bp would like to happen. Rather

they explore the possible implications of dierent judgements and

assumptions concerning the nature of the energy transition and the

uncertainties around those judgements. The scenarios are based

on existing technologies and do not consider the possible impact of

entirely new or unknown technologies.

The many uncertainties surrounding the transition of the global energy

system mean that the probability of any one of these scenarios

materializing exactly as described is negligible. Moreover, the three

scenarios do not provide a comprehensive range of possible paths for

the transition ahead. They do, however, span a wide range of possible

outcomes and so help to illustrate the key uncertainties surrounding

energy markets out to 2050.

The scenarios in this year’s Outlook have been updated to take account

of two major developments over the past year: the Russia-Ukraine

war and the passing of the Ination Reduction Act in the US. Aside

from updating for those two developments, the scenarios are based

largely on the analysis and scenarios in Energy Outlook 2022. They

do not include a comprehensive assessment of all the changes and

developments since Outlook 2022.

The Energy Outlook is produced to inform bp’s strategy and is

published as a contribution to the wider debate about the factors

shaping the energy transition. But the Outlook is only one source

among many when considering the future of global energy markets

and bp considers a wide range of other external scenarios, analysis and

information when forming its long-term strategy.

5 | bp Energy Outlook: 2023 edition

4 |

The past year has been

dominated by the terrible

consequences of the Russia-

Ukraine war and its awful toll

on lives and communities. Our

thoughts and hopes are with all

those aected.

From an energy perspective, the

disruptions to Russian energy

supplies and the resulting global

energy shortages seem likely to

have a material and lasting impact

on the energy system.

Global energy policies and

discussions in recent years have

been focused on the importance

of decarbonizing the energy

system and the transition to net

zero. The events of the past year

have served as a reminder to us

all that this transition also needs

to take account of the security

and aordability of energy.

Together these three dimensions

of the energy system – security,

aordability, and sustainability –

make up the energy trilemma.

Any successful and enduring

energy transition needs to

address all three elements of the

trilemma.

Last year’s Energy Outlook did

not include any analysis of the

possible implications of the war in

Ukraine. The scenarios in Outlook

2023 have been updated to take

account of the war, as well as

of the passing of the Ination

Reduction Act in the US.

At the time of writing, the war

is continuing with no end in

sight. As such, any analysis of

its possible implications must be

treated as preliminary. However,

the experience from the major

energy supply shocks of the

1970s suggests that events

that heightened energy security

concerns can have signicant

and persistent impacts on energy

markets.

Most importantly, the desire

of countries to bolster their

energy security by reducing their

dependency on imported energy

– dominated by fossil fuels – and

instead have access to more

domestically produced energy –

much of which is likely to come

from renewables and other non-

fossil energy sources – suggests

that the war is likely to accelerate

the pace of the energy transition.

The scale of the economic and

social disruptions over the past

year associated with the loss of

just a fraction of the world’s fossil

fuels has also highlighted the

need for the transition away from

hydrocarbons to be orderly, such

that the demand for hydrocarbons

falls in line with available supplies,

avoiding future periods of energy

shortages and higher prices.

These issues, together with the

broader implications of the energy

transition, are explored in this

year’s Energy Outlook using three

main scenarios: Accelerated,

Net Zero and New Momentum.

Together these scenarios span

a wide range of the possible

outcomes for the global energy

system over the next 30 years.

Understanding this range of

uncertainty helps bp to shape

a strategy which is resilient to

the dierent speeds and ways

in which the energy system may

transition.

The continuing rise in carbon

emissions and the increasing

frequency of extreme weather

events in recent years highlight

more clearly than ever the

importance of a decisive shift

towards a net-zero future. The

events of the past year have

highlighted the complexity and

interconnectedness of the global

energy system and the need to

address all three dimensions of

the energy trilemma. I hope this

year’s Energy Outlook is useful to

everyone trying to navigate this

uncertain future and accelerate

the transition to global net zero.

As always, any feedback on

the Outlook and how it can

be improved would be most

welcome.

Spencer Dale

Chief economist

Welcome to the

2023 edition of bp’s

Energy Outlook.

/53

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bpEnergyOutlook2023edition3bpEnergyOutlook:2023edition2EnergyOutlook2023exploresthekeytrendsanduncertaintiessurroundingtheenergytransition.EnergyOutlook2023isfocusedonthreemainscenarios:Accelerated,NetZeroandNewMomentum.Thesescenariosarenotpredictionsofwhatislikelytohappenorwhatbpwouldliketohappen.Rathertheyexplorethepossibleimplicationsofdifferentjudgementsandassumptionsconcerningthenatureoftheenergytransitionandtheuncertaintiesaroundthosejudgements.Thescenariosarebasedonexistingtechnologiesanddonotconsiderthepossibleimpactofentirelyneworunknowntechnologies.Themanyuncertaintiessurroundingthetransitionoftheglobalenergysystemmeanthattheprobabilityofanyoneofthesescenariosmaterializingexactlyasdescribedisnegligible.Moreover,thethreescenariosdonotprovideacomprehensiverangeofpossiblepathsforthetransitionahead.Theydo,however,spanawiderangeofpossibleoutcomesandsohelptoillustratethekeyuncertaintiessurroundingenergymarketsoutto2050.Thescenariosinthisyear’sOutlookhavebeenupdatedtotakeaccountoftwomajordevelopmentsoverthepastyear:theRussia-UkrainewarandthepassingoftheInflationReductionActintheUS.Asidefromupdatingforthosetwodevelopments,thescenariosarebasedlargelyontheanalysisandscenariosinEnergyOutlook2022.TheydonotincludeacomprehensiveassessmentofallthechangesanddevelopmentssinceOutlook2022.TheEnergyOutlookisproducedtoinformbp’sstrategyandispublishedasacontributiontothewiderdebateaboutthefactorsshapingtheenergytransition.ButtheOutlookisonlyonesourceamongmanywhenconsideringthefutureofglobalenergymarketsandbpconsidersawiderangeofotherexternalscenarios,analysisandinformationwhenformingitslong-termstrategy.5bpEnergyOutlook:2023edition4ThepastyearhasbeendominatedbytheterribleconsequencesoftheRussia-Ukrainewaranditsawfultollonlivesandcommunities.Ourthoughtsandhopesarewithallthoseaffected.Fromanenergyperspective,thedisruptionstoRussianenergysuppliesandtheresultingglobalenergyshortagesseemlikelytohaveamaterialandlastingimpactontheenergysystem.Globalenergypoliciesanddiscussionsinrecentyearshavebeenfocusedontheimportanceofdecarbonizingtheenergysystemandthetransitiontonetzero.Theeventsofthepastyearhaveservedasaremindertousallthatthistransitionalsoneedstotakeaccountofthesecurityandaffordabilityofenergy.Togetherthesethreedimensionsoftheenergysystem–security,affordability,andsustainability–makeuptheenergytrilemma.Anysuccessfulandenduringenergytransitionneedstoaddressallthreeelementsofthetrilemma.Lastyear’sEnergyOutlookdidnotincludeanyanalysisofthepossibleimplicationsofthewarinUkraine.ThescenariosinOutlook2023havebeenupdatedtotakeaccountofthewar,aswellasofthepassingoftheInflationReductionActintheUS.Atthetimeofwriting,thewariscontinuingwithnoendinsight.Assuch,anyanalysisofitspossibleimplicationsmustbetreatedaspreliminary.However,theexperiencefromthemajorenergysupplyshocksofthe1970ssuggeststhateventsthatheightenedenergysecurityconcernscanhavesignificantandpersistentimpactsonenergymarkets.Mostimportantly,thedesireofcountriestobolstertheirenergysecuritybyreducingtheirdependencyonimportedenergy–dominatedbyfossilfuels–andinsteadhaveaccesstomoredomesticallyproducedenergy–muchofwhichislikelytocomefromrenewablesandothernon-fossilenergysources–suggeststhatthewarislikelytoacceleratethepaceoftheenergytransition.Thescaleoftheeconomicandsocialdisruptionsoverthepastyearassociatedwiththelossofjustafractionoftheworld’sfossilfuelshasalsohighlightedtheneedforthetransitionawayfromhydrocarbonstobeorderly,suchthatthedemandforhydrocarbonsfallsinlinewithavailablesupplies,avoidingfutureperiodsofenergyshortagesandhigherprices.Theseissues,togetherwiththebroaderimplicationsoftheenergytransition,areexploredinthisyear’sEnergyOutlookusingthreemainscenarios:Accelerated,NetZeroandNewMomentum.Togetherthesescenariosspanawiderangeofthepossibleoutcomesfortheglobalenergysystemoverthenext30years.Understandingthisrangeofuncertaintyhelpsbptoshapeastrategywhichisresilienttothedifferentspeedsandwaysinwhichtheenergysystemmaytransition.Thecontinuingriseincarbonemissionsandtheincreasingfrequencyofextremeweathereventsinrecentyearshighlightmoreclearlythanevertheimportanceofadecisiveshifttowardsanet-zerofuture.Theeventsofthepastyearhavehighlightedthecomplexityandinterconnectednessoftheglobalenergysystemandtheneedtoaddressallthreedimensionsoftheenergytrilemma.Ihopethisyear’sEnergyOutlookisusefultoeveryonetryingtonavigatethisuncertainfutureandacceleratethetransitiontoglobalnetzero.Asalways,anyfeedbackontheOutlookandhowitcanbeimprovedwouldbemostwelcome.SpencerDaleChiefeconomistWelcometothe2023editionofbp’sEnergyOutlook.7bpEnergyOutlook:2023edition6Thisyear’sOutlookcanbeusedtoidentifyaspectsoftheenergytransitionthatarecommonacrossthemainscenarios.Thesetrendshelpshapecorebeliefsabouthowtheenergysystemmayevolveoverthenext30years.Thecarbonbudgetisrunningout.Despitethemarkedincreaseingovernmentambitions,CO2emissionshaveincreasedeveryyearsincetheParisCOPin2015(bar2020).Thelongerthedelayintakingdecisiveactiontoreduceemissionsonasustainedbasis,thegreaterarethelikelyresultingeconomicandsocialcosts.Governmentsupportfortheenergytransitionhasincreasedinanumberofcountries,includingthepassingoftheInflationReductionActintheUS.Butthescaleofthedecarbonizationchallengesuggestsgreatersupportisrequiredglobally,includingpoliciestofacilitatequickerpermittingandapprovaloflow-carbonenergyandinfrastructure.ThedisruptiontoglobalenergysuppliesandassociatedenergyshortagescausedbytheRussia-Ukrainewarincreasestheimportanceattachedtoaddressingallthreeelementsoftheenergytrilemma:security,affordability,andsustainability.Thewarhaslong-lastingeffectsontheglobalenergysystem.Theheightenedfocusonenergysecurityincreasesdemandfordomesticallyproducedrenewablesandothernon-fossilfuels,helpingtoacceleratetheenergytransition.Thestructureofenergydemandchanges,withtheimportanceoffossilfuelsdeclining,replacedbyagrowingshareofrenewableenergyandbyincreasingelectrification.Thetransitiontoalow-carbonworldrequiresarangeofotherenergysourcesandtechnologies,includinglow-carbonhydrogen,modernbioenergy,andcarboncapture,useandstorage.Oildemanddeclinesovertheoutlook,drivenbyfallinguseinroadtransportastheefficiencyofthevehiclefleetimprovesandtheelectrificationofroadvehiclesaccelerates.Evenso,oilcontinuestoplayamajorroleintheglobalenergysystemforthenext15-20years.Theprospectsfornaturalgasdependonthespeedoftheenergytransition,withincreasingdemandinemergingeconomiesastheygrowandindustrializeoffsetbythetransitiontolowercarbonenergysources,ledbythedevelopedworld.Therecentenergyshortagesandpricespikeshighlighttheimportanceofthetransitionawayfromhydrocarbonsbeingorderly,suchthatthedemandforhydrocarbonsfallsinlinewithavailablesupplies.Naturaldeclinesinexistingproductionsourcesmeanthereneedstobecontinuingupstreaminvestmentinoilandnaturalgasoverthenext30years.Theglobalpowersystemdecarbonizes,ledbytheincreasingdominanceofwindandsolarpower.Windandsolaraccountforallormostofthegrowthinpowergeneration,aidedbycontinuingcostcompetitivenessandanincreasingabilitytointegratehighproportionsofthesevariablepowersourcesintopowersystems.Thegrowthinwindandsolarrequiresasignificantaccelerationinthefinancingandbuildingofnewcapacity.Theuseofmodernbioenergy–modernsolidbiomass,biofuelsandbiomethane–growsrapidly,helpingtodecarbonizehard-to-abatesectorsandprocesses.Low-carbonhydrogenplaysacriticalroleindecarbonizingtheenergysystem,especiallyinhard-to-abateprocessesandactivitiesinindustryandtransport.Low-carbonhydrogenisdominatedbygreenandbluehydrogen,withgreenhydrogengrowinginimportanceovertime.Hydrogentradeisamixofregionalpipelinestransportingpurehydrogenandglobalseabornetradeinhydrogenderivatives.Carboncapture,useandstorageplaysacentralroleinenablingrapiddecarbonizationtrajectories:capturingindustrialprocessemissions,actingasasourceofcarbondioxideremoval,andabatingemissionsfromtheuseoffossilfuels.Arangeofmethodsforcarbondioxideremoval–includingbioenergycombinedwithcarboncaptureandstorage,naturalclimatesolutions,anddirectaircarboncapturewithstorage–willbeneededfortheworldtoachieveadeepandrapiddecarbonization.CoreBeliefs9bpEnergyOutlook:2023edition8ContentsOverview10Threescenarios:NetZero,AcceleratedandNewMomentum12ComparisonwithIPCCpathways14Finalenergydemand16Trendsinenergydemand18ChangessinceEnergyOutlook202220ImpactsoftheRussia-Ukrainewar22Theeffectsofthewaroneconomicgrowth24Ashiftingenergymix26Oilandnaturalgastrade28Changeincarbonemissions30Russianproductionofoilandgas32EUnaturalgasdemandandsourcesofsupply34InflationReductionAct36Oil38Oildemand40Oilintransport42Oilsupply44Naturalgas46Naturalgasdemand48LNGtrade50LNGexports52Renewableenergy54Windandsolar56Bioenergy58Electricity60Electricitydemand62Electricitygenerationbyfuel64Electricitygenerationbyregion66Low-carbonhydrogen68Low-carbonhydrogendemand70Low-carbonhydrogensupply72Carbonmitigationandremovals74Carboncaptureuseandstorage76Carbondioxideremovals78Investmentandcriticalminerals80Levelsofimpliedinvestment82Demandforcriticalminerals84Annex86Datatables88ModellingtheimpactoftheRussia-Ukrainewar90Economicimpactofclimatechange92Investmentmethodology94Carbonemissionsdefinitionsandsources96Otherdatadefinitionsandsources9810Threescenariostoexploretheuncertaintiessurroundingthespeedandshapeoftheenergytransitionto2050AcceleratedandNetZeroarebroadlyinlinewith‘Parisconsistent’IPCCscenariosFinalenergydemandpeaksinallthreescenariosasgainsinenergyefficiencyaccelerateThefutureofglobalenergyisdominatedbyfourtrends:decliningroleforhydrocarbons,rapidexpansioninrenewables,increasingelectrification,andgrowinguseoflow-carbonhydrogen11bpEnergyOutlook:2023editionOverview200020102020203020402050051015202530354045AcceleratedNewMomentumNetZeroCarbonemissionsincludeCO2emissionsfromenergyuse,industrialprocesses,naturalgasﬂaring,andmethaneemissionsfromenergyproduction.12GtofCO2ebp’sEnergyOutlook2023usesthreescenarios(Accelerated,NetZeroandNewMomentum)toconsiderarangeofpossiblepathwaysfortheglobalenergysystemto2050andtohelpshapearesilientstrategyforbp.Thescenariosarenotpredictionsofwhatislikelytohappenorwhatbpwouldliketohappen.Rather,thescenariosaredesignedtospanawiderangeoftheoutcomespossibleoutto2050.Indoingso,theyinformbp’scorebeliefsabouttheenergytransitionandhelpshapeastrategythatisresilienttothemanyuncertaintiessurroundingthespeedandnatureoftheenergytransition.Thescenariosinthisyear’sOutlookhavebeenupdatedtotakeaccountoftwomajordevelopmentsoverthepastyear:theRussia-UkrainewarandthepassingoftheInflationReductionActintheUS.Asidefromupdatingforthosetwodevelopments,thescenariosarelargelybasedontheanalysisandscenariosinEnergyOutlook2022.Thescenariosconsidercarbonemissionsfromenergyproductionanduse,mostnon-energyrelatedindustrialprocesses,andnaturalgasflaringplusmethaneemissionsfromtheproduction,transmission,anddistributionoffossilfuels(seepages96-97oftheAnnexformoredetails).AcceleratedandNetZeroexplorehowdifferentelementsoftheenergysystemmightchangeinordertoachieveasubstantialreductionincarbonemissions.Inthatsense,theycanbeviewedas‘whatif’scenarios:whatelementsoftheenergysystemmightneedtochangeiftheworldcollectivelytakesactionforCO2-equivalentemissions(CO2e)tofallbyaround75%by2050(relativeto2019levels)inAcceleratedand95%inNetZero.Bothscenariosareconditionedontheassumptionthatthereisasignificanttighteninginclimatepolicies.NetZeroalsoembodiesashiftinsocietalbehaviourandpreferences,whichfurthersupportsgainsinenergyefficiencyandtheadoptionoflow-carbonenergy.ThecarbonemissionsremaininginNetZeroin2050couldbeeliminatedbyeitheradditionalchangestotheenergysystemorbythedeploymentofcarbondioxideremoval(CDR)(seepages78-79).ThiswilldependonthecostsofCDRandofabatinggreenhousegassesemanatingfromoutsidetheenergysystem,neitherofwhichareexplicitlyconsideredintheOutlook.NewMomentumisdesignedtocapturethebroadtrajectoryalongwhichtheglobalenergysystemiscurrentlytravelling.Itplacesweightonthemarkedincreaseinglobalambitionfordecarbonizationinrecentyears,aswellasonthemannerandspeedofdecarbonizationseenovertherecentpast.CO2eemissionsinNewMomentumpeakinthe2020sandby2050arearound30%below2019levels.13bpEnergyOutlook:2023editionKeypointsCarbonemissionsThreescenariostoexploretheuncertaintiessurroundingthespeedandshapeoftheenergytransitionto2050OverviewOilNaturalgas1.5°C2°CCoal-100%-80%-60%-40%-20%0%IPCC1.5°CinterquartilerangeNetZeroNetZeroAcceleratedCumulativeCO2eemissionsin2015-2050aretheadditionofCO2emissionsfromenergyandindustrialprocesses,ﬂaring,andmethaneemissions1.5°Cscenarioswithnoorlimitedovershootand2°Cscenarioswithimmediateaction.SeeAnnexforselectionofIPCCscenarios600700800900100011001200IPCC10th-90thpercentileIPCC25th-75thpercentile14ThepaceandextentofdecarbonizationinAcceleratedandNetZeroarebroadlyalignedwitharangeofIPCCscenarioswhichareconsistentwithmaintainingglobalaveragetemperatureriseswellbelow2ºCand1.5ºCabovepre-industriallevelsin2100respectively(seeannexpages96-97formoredetailsofIPCCscenariosused).TheEnergyOutlookscenariosextendonlyto2050anddonotmodelallformsofgreenhousegassesorallsectorsoftheeconomy.Assuch,itisnotpossibletomapdirectlybetweenthescenariosandtheirimplicationsforthecarbonbudgetandtheimpliedincreaseinaverageglobaltemperaturesby2100.However,itispossibletoprovideanindirectinferencebycomparingthecumulativecarbonemissionsinAcceleratedandNetZerofortheenergysectorovertheperiod2015to2050withtherangesofcorrespondingcarbontrajectoriestakenfromthescenariosincludedintheIPCCSixthAssessmentReport–ClimateChange2022:Impacts,AdaptationandVulnerability.CumulativeCO2eemissionsinAcceleratedarebroadlyinthemiddleoftheinterquartilerangeofwellbelow2ºCIPCCscenarios.ThetrajectoryforcarbonemissionsinAcceleratedlieswithintheIPCCrangeovertheentireoutlook.ForNetZero,cumulativeCO2eemissionsarewithinthe10thto90thpercentilesofIPCCscenariosconsistentwith1.5ºC(withnoorlimitedovershoot),butarealittleabovetheinterquartilerange.CarbonemissionsinNetZerodeclinemoreslowlythantherangeofIPCC1.5ºCscenariosoutto2030,beforefallingmorequicklythanthemedianscenariofurtherout.InthemedianIPCCscenarioconsistentwith1.5ºC(withnoorlimitedovershoot),netCO2emissionsdeclineby48%by2030(relativeto2019levels).Withinthis,CO2emissionsfrom‘fossilfuelsandindustrialprocesses’fallby40%.Thiscompareswithafallof30%inNetZero.ThefallinfossilfuelsandindustrialemissionsinthemedianIPCCscenarioisdrivenlargelybya75%fallinglobalcoalconsumptionby2030,withmoremodestfallsofaround10%inoilandnaturalgasconsumption.Thefallsinoilandnaturalgasby2030inNetZeroareconsistentwiththerangeofIPCC1.5ºCscenarios,butthefallincoalconsumptionissignificantlysmaller.Thatreflectsthecontinuingimportanceofcoalasanaffordableandrelativelyabundantfuelinmanyemergingeconomieswhereenergydemandisexpandingrapidly.Thetimeittakesforpartsoftheenergysectortotransitionawayfromfossilfuelshighlightsthelikelyimportanceofcarbondioxideremoval(CDR)inhelpingtoreducenetcarbonemissionsduringthetransitionperiodwhilethesereformsareundertaken,aswellasoffsettinganyremaininggrossemissionsinanetzeroenergysystem(seepages78-79).15bpEnergyOutlook:2023editionKeypointsAcceleratedandNetZeroarebroadlyinlinewith‘Parisconsistent’IPCCscenariosOverviewGtofCO2e2019-2030changeCumulativeCO2eemissionsfromenergy(2015-2050)ChangeinfossilfuelsinIPCC1.5°Cscenarios200020102020203020402050200250300350400450500550AcceleratedNewMomentumNetZero20190100200300400500600OilNaturalgasCoalElectricityHydrogenOther2050NewMomentumAcceleratedNetZero16Globalenergydemandmeasuredatthefinalpointofuse(totalfinalconsumption)peaksinallthreescenariosasgainsinenergyefficiencyaccelerate,morethanoffsettingtheupwardsimpactofincreasinglivingstandardsacrossmuchoftheemergingworld.Totalfinalconsumption(TFC)peaksinthemid-to-late2020sinAcceleratedandNetZero,withfinalenergyconsumption15-30%below2019levelsby2050.Incontrast,TFCincreasesuntilaround2040inNewMomentum,afterwhichitbroadlyplateauswithenergyconsumptionin2050around10%above2019levels.Themainfactordrivingthesedifferencesinfinalenergyconsumptionisthepaceofimprovementinenergyefficiency.Thegainsinglobalenergyefficiencyovertheoutlook–measuredbycomparinggrowthinfinalenergydemandwitheconomicactivity–aremuchquickerthanoverthepast20yearsinallthreescenarios,particularlyinAcceleratedandNetZero.Thatreflectsanumberoffactorsincluding:theincreasinguseofelectricityatthefinalpointofuse,moreefficientuseofmaterialsthroughincreasedrecyclingandreuse,andagreaterfocusonenergyconservation,givengreaterimpetusbytheheightenedfocusonenergysecurity(seepages22-23).TheassumedincreaseinthepaceofenergyefficiencyimprovementsinAcceleratedandNetZeroisacentralelementinfacilitatingarapidreductionincarbonemissions,withoutwhichtherewouldneedtobeevenfastergrowthinlow-carbonenergytoachievethesameoutcome.FinalenergydemandinemergingmarketscontinuestogrowoverthecomingdecadeandbeyondinNewMomentumandAccelerated,drivenbyincreasingprosperityandimprovinglivingstandards.Incontrast,demandindevelopedeconomiespeaksinthenextfewyearsinallthreescenarios.Totalfinalconsumptiondecarbonizesasthedirectuseoffossilfuelsdeclines,theworldelectrifiesandthepowersectorisincreasinglydecarbonized.WithinTFC,fossilfuelsusedatthefinalpointofenergyusedeclinefromashareofaround65%in2019to20-50%by2050acrossthethreescenarios.Withinhydrocarbons,theshareofcoalfallsparticularlysharplyastheworldincreasinglyshiftstotheuseofelectricityandlow-carbonhydrogeninindustry,asdoestheshareofoil,drivenprimarilybythefallinguseofoilinroadtransport(seepages42-43).Theroleofelectricityincreasessubstantiallyandbroadlyuniformlyacrossallthreescenarios,withelectricityconsumptionincreasingbyaround75%by2050.17bpEnergyOutlook:2023editionKeypointsFinalenergydemandpeaksinallthreescenariosasgainsinenergyefficiencyaccelerateOverviewEJEJTotalfinalconsumptionTotalfinalconsumptionbyfuel20192025203020352040204520500%20%40%60%80%20192025203020352040204520500%20%40%60%80%20192025203020352040204520500%5%10%15%20%25%AcceleratedNewMomentumNetZero20192025203020352040204520500%20%40%60%18Thechangingcompositionofenergydemandovertheoutlookischaracterizedbyfourtrends:agradualdeclineintheroleofhydrocarbons,rapidgrowthinrenewableenergy,andanincreasingelectrificationoftheworld,supportedbylow-carbonhydrogeninprocessesandactivitieswhicharehardtoelectrify.Theroleofhydrocarbonsdiminishesastheworldtransitionstolowercarbonenergysources.Theshareoffossilfuelsinprimaryenergydeclinesfromaround80%in2019tobetween55-20%by2050.Thetotalconsumptionoffossilfuelsdeclinesinallthreescenariosovertheoutlook.Thiswouldbethefirsttimeinmodernhistorythattherehasbeenasustainedfallinthedemandforanyfossilfuel.Renewableenergyislargelymadeupofwindandsolarpowerandbioenergy,andalsoincludesgeothermalpower.Renewablesexpandrapidlyovertheoutlook,offsettingthedecliningroleoffossilfuels.Theshareofrenewablesinglobalprimaryenergyincreasesfromaround10%in2019tobetween35-65%by2050,drivenbytheimprovedcostcompetitivenessofrenewables,togetherwiththeincreasingprevalenceofpoliciesencouragingashifttolow-carbonenergy.Inallthreescenarios,thepaceatwhichrenewableenergypenetratestheglobalenergysystemisquickerthananypreviousfuelinhistory.Thegrowingimportanceofrenewableenergyisunderpinnedbythecontinuingelectrificationoftheenergysystem.Theshareofelectricityintotalfinalenergyconsumptionincreasesfromaroundafifthin2019tobetweenathirdandahalfby2050.Thedecarbonizationoftheenergysystem,especiallyinAcceleratedandNetZero,issupportedbythegrowinguseoflow-carbonhydrogeninhard-to-abateprocesseswhicharedifficultorcostlytoelectrify.Theshareofprimaryenergyusedintheproductionoflow-carbonhydrogenincreasestobetween13-21%by2050inAcceleratedandNetZero.19bpEnergyOutlook:2023editionKeypointsThefutureofglobalenergyisdominatedbyfourtrends:decliningroleforhydrocarbons,rapidexpansioninrenewables,increasingelectrification,andgrowinguseoflow-carbonhydrogenOverviewShareofprimaryenergyShareofprimaryenergyShareoftotalfinalconsumptionShareofprimaryenergyusedinproductionofhydrogenFossilfuelsRenewablesElectricityLow-carbonhydrogen20ChangessinceEnergyOutlook2022TheRussia-Ukrainewarislikelytohavelong-lastingeffectsontheglobalenergysystemTheRussia-UkrainewarleadstoadownwardrevisionintheoutlookforglobalGDPandenergydemandIncreasedenergysecurityconcernstriggerashifttowardsamorelocal,lower-carbonenergymixEnergysecurityconcernsreducetheroleofoilandnaturalgasimportsTheRussia-UkrainewarandtheInflationReductionActlowertheoutlookforcarbonemissionsRussianproductionofoilandnaturalgasreviseddownasaresultofthewarEU’sneedforLNGimportsin2030dependsonitssuccessinreducingnaturalgasdemandTheInflationReductionActprovidessignificantsupportforlow-carbonenergyandtechnologiesintheUS21bpEnergyOutlook:2023edition22TheRussia-Ukrainewarislikelytohaveapersistenteffectonthefuturepathoftheglobalenergysystem,increasingthefocusonenergysecurity,weakeningeconomicgrowth,andchangingthemixofenergysupplies.ThepastyearhasbeendominatedbytheterribleconsequencesoftheRussia-Ukrainewaranditsawfultollonlivesandcommunities.Ourthoughtsandhopesarewithallthoseaffected.Fromanenergyperspective,thisyear’sOutlookhasmodelledtheimpactoftheRussia-Ukrainewarasoperatingthroughthreemainchannels:energysecurity,economicgrowth,andcompositionofglobalenergysupplies.Atthetimeofwriting,thewariscontinuingwithnoendinsight;assuchthisanalysisshouldbetreatedaspreliminaryandsubjecttochangedependingonfuturedevelopments.Energysecurity:theincreasedfocusonenergysecuritytriggeredbyconcernsaboutenergyshortagesandvulnerabilitytogeopoliticaleventsisassumedtocausecountriesandregionstostrivetoreducetheirdependencyonimportedenergyandinsteadconsumemoredomesticallyproducedenergy.Italsogivesgreaterincentivetoimproveenergyefficiency,reducingtheneedforalltypesofenergy.Economicgrowth:thehigherfoodandenergypricesassociatedwiththeRussia-Ukrainewarhavecontributedtoasharpslowinginglobaleconomicgrowth.Thedirecteconomicimpactofthiscommoditypriceshockissettopersistforthenextfewyears.Furtherout,thewarisassumedtoreducesomewhatthepaceofglobalintegrationandtrade,ascountriesandregionsheightentheirfocusondomesticresilienceandreducetheirexposurestointernationalshocks.Thisslowerpaceofglobalizationleadstoasmallreductioninaverageeconomicgrowthoverthenext30years.Compositionofglobalenergysupplies:thefutureofRussianenergysuppliesisuncertain.Thescenariosinthisyear’sOutlookassumeapersistentreductioninRussianexportsofhydrocarbons.Inthenearterm,thisreflectstheimpactofvoluntaryandmandatorysanctionsonRussianenergyexports.Furtherout,itstemsfromtheassumptionthatsanctionsaffectingRussia’saccesstoforeigninvestmentandtechnologieseaseonlygradually.MoredetailsontheassumptionsusedtomodeltheimpactoftheRussia-UkrainewarcanbefoundintheAnnex(pages90-91).ChangessinceEnergyOutlook202223bpEnergyOutlook:2023editionKeypointsTheRussia-Ukrainewarislikelytohavelong-lastingeffectsontheglobalenergysystemChangingmixofglobalenergysuppliesWeakereconomicgrowthHeightenedenergysecurity-8%-6%-4%-2%0%202520352050WorldEmergingDevelopedDuetoeﬃciencygainsDuetolowerGDP20352050-8%-6%-4%-2%0%EO22=EnergyOutlook202224ChangerelativetoEO22ChangerelativetoEO22TheprospectsforglobalGDPandenergydemandareweakerthaninlastyear’sOutlook,reflectingtheshort-andlonger-termimpactsoftheRussia-Ukrainewar.ThelevelofglobalGDPunderlyingallthreescenariosinthisOutlookisaround3%lowerin2025and2035thanEnergyOutlook2022andaround6%lowerin2050.TheweakerprofileforeconomicactivityovertheneartermismostlydrivenbythecommoditypriceshockassociatedwiththeRussia-Ukrainewar.Thedirectimpactofthecommoditypriceshocklargelyfadesby2030,althoughthewarisassumedtohaveamorepersistentscarringeffectontheRussianandUkrainianeconomies.Beyond2030,thelowerlevelofGDPreflectsthegrowingimpactofthesloweraverage(ortrend)economicgrowthassociatedwiththelowerassumedpathsofinternationaltradeandinterconnectedness.GlobalGDPgrowthaveragesaround2.4%p.a.(onaPurchasingPowerParitybasis)overtheoutlook,comparedwith2.6%inEnergyOutlook2022.Theimpactofthisreductionintrendeconomicgrowthisgreatestinthoseregionsthatbenefitthemostfrominternationaltradeandproductivitytransfers.In2050,GDPinChinais7%lowerthaninlastyear’sOutlookandis12%lowerinAfrica,butisonly1%lowerintheUS.AsinrecentEnergyOutlooks,theassumedtrajectoryforglobalGDPincludesanestimateoftheimpactofclimatechangeoneconomicgrowth.Thisincludestheimpactofbothincreasingtemperaturesoneconomicactivityandtheupfrontcostsofactionstoreducecarbonemissions.MoredetailsoftheapproachanditslimitationscanbefoundintheAnnex(seepages92-93).TheleveloftotalfinalenergyconsumptionisalsoweakerthaninthepreviousOutlook,downbyaround3.5%in2035acrossallthescenariosandbybetween5.5%-6%in2050.In2035,slightlyoverhalfofthedownwardrevisioninenergyconsumptioninAcceleratedreflectstheweakerprofileforGDP.Theremainderisdrivenbygreatergainsinenergyefficiencyreflectingboththeheightenedfocusonenergysecurityandtheimpactofhigherenergyprices.By2050,thelowerlevelofGDPaccountsforaroundthree-quartersoftherevisiontoenergyconsumption.ChangessinceEnergyOutlook202225bpEnergyOutlook:2023editionKeypointsImpactofRussia-UkrainewaronglobalGDPChangeintotalfinalconsumptioninAcceleratedTheRussia-UkrainewarleadstoadownwardrevisionintheoutlookforglobalGDPandenergydemandTotalOilNaturalgasCoalNuclearRenewablesHydro-8%-6%-4%-2%0%2%4%6%-2.5%-2%-1.5%-1%-0.5%0%202520302035204020452050Basedontotalﬁnalconsumption.ImpactofIRAnotincluded.26Changein2035relativetoEO22ChangerelativetoEO22TheincreasedimportanceplacedonenergysecurityasaresultoftheRussia-Ukrainewarleadsovertimetoashiftawayfromimportedfossilfuelstowardslocallyproducednon-fossilfuels,acceleratingtheenergytransition.Sinceoilandnaturalgasarethetwomostheavilytradedfuelsinternationally,theyaremostimpactedbytheincreasedfocusonenergysecurity(seepages22-23).InNewMomentum,the2%lowerlevelofprimaryenergydemandin2035relativetoEnergyOutlook2022islargelyaccountedforbya5%downwardrevisiontooildemandand6%lowernaturalgasdemand.TheseeffectsaremostconcentratedinemergingAsiaandtheEU,bothofwhichcurrentlyhavesignificantrelianceonoilandnaturalgasimports.Coalconsumptionisalsolowerthaninlastyear’sEnergyOutlook,butthedownwardrevisionissmallerthanforoilandnaturalgas.ThisreflectsthecontinuingheavyuseofdomesticcoalresourcesinmanypartsofAsia.Incontrasttothedownwardpressureonoilandnaturalgasimports,anddespitethelowerlevelofoverallenergydemand,theconsumptionofenergythatisproducedlocallyisboostedasaresultoftheheightenedenergysecurityconcerns.Thisparticularlyincreasestheuseofnon-fossilfuelsastheytendtobeproducedandconsumedlocally.TheuseofrenewablesandnuclearenergyinNewMomentumin2035arehigherthaninlastyear’sOutlook,whilehydropowerislargelyunchanged.Thisshifttowardslocallyproducednon-fossilfuelsattheexpenseofimportedhydrocarbonshelpstoacceleratetheenergytransition(seepages28-29).Thecarbon-intensityofthefuelmixinNewMomentumby2035inthisyear’sOutlookisaroundonepercentagepointlowerthaninOutlook2022,andaroundtwopercentagepointslowerby2050.ChangessinceEnergyOutlook202227bpEnergyOutlook:2023editionKeypointsChangeinprimaryenergyinNewMomentumChangeincarbonintensityinNewMomentumIncreasedenergysecurityconcernstriggerashifttowardsamorelocal,lower-carbonenergymix20002010202020302040205020%25%30%35%40%45%50%55%2000201020202030204020500%5%10%15%20%25%30%35%2000201020202030204020500%5%10%15%20%25%30%35%EnergyOutlook2023EnergyOutlook202228EUChinaIndiaShareShareShareTheincreasedpreferenceforlocallyproducedenergystemmingfromheightenedenergysecurityconcernsreducesimportsofoilandnaturalgas.Theimpactofincreasedenergysecurityconcernsonenergytradeismostpronouncedonoilandnaturalgas,whicharethetwomostheavilytradedfuels.ThisimpactisespeciallymarkedinChinaandIndia,whocurrentlyimportbetween75%-85%oftheoiltheyuseandbetween40-55%oftheirnaturalgas.TheeffectofheightenedenergysecurityconcernsisalsoparticularlyevidentintheEUgivenitspreviousdependenceonnaturalgasimportsfromRussia,anditsheavydependenceonoilandgasimportsmoregenerally.Together,theEU,ChinaandIndiaaccountedforaround45%ofglobaloilimportsandaround50%ofnaturalgasimportsin2021.Inallthreeregions,heightenedenergysecurityconcernsleadtoapermanentlylowershareofimportedoilandgasinprimaryenergy.In2035,theircombinedimportsofoilandnaturalgasareover10%lowerinNewMomentumthaninOutlook2022.SimilareffectsareapparentinAcceleratedandNetZero.Thelimitedscopetoincreasedomesticproductionofoilandnaturalgasinthesecountriesandregionsmeansthatthereducedshareofimportedoilandgasinprimaryenergyisoffsetbygreaterconsumptionofdomesticallyproducedrenewables.ChangessinceEnergyOutlook202229bpEnergyOutlook:2023editionKeypointsEnergysecurityconcernsreducetheroleofoilandnaturalgasimportsOil&gasimportsasashareofprimaryenergyinNewMomentum-3000-2500-2000-1500-1000-5000203020402050NewMomentumNetZeroNewMomentumNetZeroNewMomentumNetZeroLowerGDPLowercarbonintensityCO2emissionsformcombustedfuelsonlyEO23=EnergyOutlook2023200020102020203020402050202530354045EnergyOutlook2023EnergyOutlook202230MtofCO2GtofCO2eTheimpactoftheRussia-Ukrainewar,togetherwiththepolicysupportprovidedbytheInflationReductionAct,reducescarbonemissionsovertheoutlook.Carbonemissionsinthisyear’sNewMomentumarearound1.3GtCO2(3.7%)lowerin2030thaninEnergyOutlook2022.Thisdownwardrevisionincreasestoaround2.0GtCO2(6.4%)in2040and2.6GtCO2(9.3%)in2050.ThelowerlevelofcarbonemissionsinNewMomentumislargelydrivenbytheweakerGDPprofilecausedintheneartermbytheimpactofthewaroncommodityprices,andfurtheroutbythereductioninthepaceofgrowthofglobalintegrationandtrade.Theimpactofweakereconomicactivityincreasesovertheoutlookastheeffectoftheslowertrendrateofgrowthcompoundsovertime.ThelowerprofileforcarbonemissionsinNewMomentumalsoreflectsmorerapidreductionsinthecarbonintensityofGDP–theamountofcarbonemittedperunitofGDPproduced–largelyreflectingtheshifttowardslocallyproducednon-fossilfuelspromptedbyheightenedenergysecurityconcerns.Thesupportforlow-carbonenergysourcesandtechnologiesintheUSprovidedbytheIRAalsocontributestothisfasterdeclineinthecarbonintensityofGDP(seepages26-27).ThedownwardrevisiontocarbonemissionsinNewMomentumfrom2035onwardsaveragesaround2.2GtCO2eperyear–roughlytheamountbywhichglobalcarbonemissionsfellin2020asaresultofCOVIDlockdowns.ThedownwardrevisionofcarbonemissionsinNetZeroislessthaninNewMomentum,averagingaround0.8GtCO2perannumovertheoutlook.ThissmallerimpactreflectsthegreaterlevelofdecarbonizationinNetZero,whichmeansthatthereducedlevelofenergydemandstemmingfromtheweakerGDPprofileleadstoasmallersavingincarbonemissionsthaninNewMomentum.ThereductionincarbonintensityinNetZeroby2050comparedtothatinOutlook2022isalsolessthaninNewMomentum,reflectingthesmallerimpactofenergysecurityconcernsinNetZeroastheenergysystemdecarbonizesandbecomesincreasinglydominatedbynon-fossilfuels–themajorityofwhichareproducedlocally.ChangessinceEnergyOutlook202231bpEnergyOutlook:2023editionKeypointsChangeincarbonemissions:EO23versusEO22Carbonemissions:EO23versusEO22inNewMomentumTheRussia-UkrainewarandtheInflationReductionActlowertheoutlookforcarbonemissions202220302035204020452050-2-1.5-1-0.50GasDemandLNGTrade-250-200-150-100-50050100PipelinetradeDomesticproductionLNGtradeLNGexports(excl.Russia)RussiaLNGexportsNetchange32Mb/dBcmPriortotheRussia-Ukrainewar,Russiawastheworld’slargestenergyexporter.TheimpactofthewarreducesRussia’sproductionofbothoilandnaturalgas.Oil:TheprospectsforRussianoilproductioninthenear-termareaffectedmostsignificantlybytheformalandinformalsanctionsonimportsofRussianoil.Furtherout,theoutlookismostheavilyinfluencedbytheimpactofsanctionsonRussia’saccesstowesterntechnologyandinvestment.InNewMomentum,Russianoilproductionovermuchoftheoutlookisaround1.3Mb/d(13%)lowerthaninOutlook2022.Thisreflectsacombinationoffasterdeclineratesofexistingoperatingassetsandacurtailingofnewprospectivedevelopments.Therearesimilar-sizeddownwardrevisionsinAcceleratedandNetZero.Asaresult,Russianoilproductiondeclinesfromaround12Mb/din2019tobetween7and9Mb/din2035acrossthethreescenarios.Naturalgas:ThecombinationofweakerGDPandareducedpreferenceforimportedgasduetoenergysecurityconcernsmeansthatnaturalgasdemandinthethreescenariosin2030isbetween130-250Bcm(3.5-5%)lowerinthisyear’sEnergyOutlookthaninOutlook2022.Mostofthisdownwardrevisioningasdemandismatchedbyreducedpipelinegastrade,drivenbythealmosttotaleliminationofRussianpipelineexportstotheEU.Productionofgasfordomesticuseisalsoslightlylower.OutsideofRussia,thisfalltakesplaceprincipallyintheUSastheshifttotheuseofalternativelowercarbonenergiesthereaccelerates.ThelevelofglobalLNGtradein2030inthethreescenariosissimilartothatinlastyear’sOutlook.However,thegeographicalpatternofthattradeisdifferent.RestrictionslimitingRussia’saccesstoexternalfinanceandtechnologymeanthatthesignificantexpansioninRussia’sLNGexportsenvisagedinEnergyOutlook2022largelyfailstomaterialize.Offsettingthat,thelevelofnon-RussianLNGexportsin2030inthisyear’sOutlookhasbeenrevisedupbyaround25-40BcminNewMomentumandAccelerated,withtheUSaccountingformorethanhalfofthoseadditionalexports.ChangessinceEnergyOutlook202233bpEnergyOutlook:2023editionKeypointsChangeinRussianoilproduction:EO23versusEO22inNewMomentumChangesinnaturalgasbytypeofsupplyandinLNGtradein2030:EO23versusEO22inNewMomentumRussianproductionofoilandnaturalgasreviseddownasaresultofthewar2019EO22EO23EO22EO23EO22EO230100200300400500AcceleratedDomesticproductionOthernetpipelineimportsRussianpipelineimportsLNGimportsNetZeroNewMomentum34BcmTheEUisattheepicentreofthedisruptionstoglobalnaturalgasmarketsfollowingthereductionsinRussianpipelinegasexports.TheextenttowhichthelossofRussianpipelineexportsrequirestheEUtosourcealternativesuppliesofgasdependsonhowsuccessfulitisinreducingitsdemandfornaturalgasasitdecarbonizesitsenergysystem.TheEU’sdesiretoreduceitsdependencyonimportedgasgiventheincreasedenergysecurityconcerns,combinedwiththeweakerGDPprofile,meansEUnaturalgasdemandinthethreescenariosin2030isaround50-60Bcmlowerinthisyear’sOutlookrelativetoEnergyOutlook2022.Inlastyear’sNewMomentum,EUgasdemandin2030wasonlymodestlylowerthanitslevelin2019.EUgasdemandislowerinthisyear’sOutlook.However,thelargerfallinRussianexportsofpipelinegasmeansEU’sLNGimportsin2030inNewMomentumarearound70Bcmhigherthanin2019.TheremainingshortfallofnaturalgasleftbythelossofRussianpipelinegasismetbyincreasedpipelineimportsfromacombinationofNorway,Algeria,andAzerbaijan.AsimilarchangeingasdemandisseeninAccelerated.AlthoughEUconsumptionofnaturalgasin2030isaround30%lowerthan2019levels,asignificantincreaseinLNGimports(40Bcm)in2030relativeto2019levelsisnonethelessneededtomeetdemand,intheabsenceofRussianpipelinegas.Incontrast,inNetZero,acombinationoffastergainsinenergyefficiency,rapidgrowthofwindandsolarpowerandincreasingelectrificationoffinalenergyconsumptionmeansEUnaturalgasdemandin2030isaround50%(190Bcm)below2019levels.ThisreductionindemandisgreaterthanthelossofRussianpipelinegasimports,implyingthatthelevelofLNGimportsneededtomeettheEU’sdomesticgasconsumptionin2030islowerthanin2019.ChangessinceEnergyOutlook202235bpEnergyOutlook:2023editionKeypointsEUnaturalgasdemandandsourcesofsupply:EO23comparedwithEO22EU’sneedforLNGimportsin2030dependsonitssuccessinreducingnaturalgasdemand200020102020203020402050-101234567AcceleratedNewMomentumNetZero36GtofCO2eTheUSInflationReductionAct(IRA),whichwassignedintolawinAugust2022,includesasignificantpackageoflargelysupply-sidemeasuressupportinglow-carbonenergysourcesanddecarbonizationtechnologiesintheUS.ThemodellingoftheIRAinthisOutlookfocusesonitspotentialimpactontheUSenergysystem.Thepossibleimpactsonothercountriesandregionsarenotconsidered,althoughinpracticetheIRAhasthepotentialtohavepositivespillovereffectsbyhelpingtoreduceglobaltechnologycosts,expandinternationallytradablesuppliesofsomeformsoflow-carbonenergy,andincreasethepressureonothercountriesandregionstooffersimilartypesofincentives.TheimpactoftheIRAdependsimportantlyontheimplementationoftheincentivesbytheUSauthorities,aswellasonregulatoryreformatastateandfederallevel.Italsohingesonthespeedwithwhichtheprivatesectorcanobtainthevariousplanningandpermittingapprovalsneededtobuildoutlowcarbonenergysourcesandtechnologies.ThescenariosinthisOutlookassumethattherearenomaterialchangesinplanningandpermittingprocessesotherthanthosedirectlyaffectedbyIRAprovisions.TheimpactoftheIRAontheoutlookfortheUSenergysystemisconcentratedintheNewMomentumscenario.UScarbonemissionsfallbyaround22%by2030inNewMomentumrelativeto2019levels,andbyaround60%by2050.ThescaleofthepolicysupportalreadyembodiedinAcceleratedandNetZeromeanstheincrementalimpactoftheIRAprovisionsonthesescenariosisrelativelylimited.SomeofthemainimpactsoftheIRAonNewMomentuminclude:Windandsolarpower:asubstantialaccelerationinsolarandwinddeployment,withcapacityincreasingmorethanfour-foldby2030from2019levels.By2050solarandwindcapacityismorethantentimeshigherthanin2019,witharound20%ofinstalledcapacityusedtosupportgreenhydrogenproduction.Thisincreaseisunderpinnedbyacorrespondingaccelerationinotherenablingfactors,particularlytheexpansionofthetransmissiongrid.Hydrogen:significantsupportforlow-carbonhydrogensupply,increasingitsuseto4mtpain2030andto26mtpain2050.Thehydrogenincentivesareespeciallysupportiveofgreenhydrogen,whichaccountsforaround60%ofUSlow-carbonhydrogenin2050,comparedwitharound25%inEnergyOutlook2022.Electricvehicles:theprovisionsintheIRAthatsupportelectricvehicleownership,combinedwithnewvehiclemanufacturerandstate-levelcommitments,increasethesizeoftheUSelectricvehicleparcbyaround15%bythemid-2030s.Biofuels:theadditionalcreditsincludedintheIRAfacilitatefasterpenetrationofbioderivedsustainableaviationfuel(SAF),suchthatitreachesaround1300PJinNewMomentumin2050,morethandoublethelevelprojectedinEnergyOutlook2022.Carboncapture,useandstorage(CCUS):theincreasedincentivesforCCUSintheIRAsupportitsgreateruseinthepowersector,aswellasinindustryandtoproducebluehydrogen.WiththeIRAandotherincentives,CCUSdeploymentintheUSreachesover100mtpaby2035andcloseto400mtpaby2050.ChangessinceEnergyOutlook202237bpEnergyOutlook:2023editionKeypointsUSCarbonemissionsTheInflationReductionActprovidessignificantsupportforlow-carbonenergyandtechnologiesintheUS3839bpEnergyOutlook:2023editionOildemandfallsovertheoutlookasuseinroadtransportationdeclinesTheroleofoilintransportdeclinesastheworldswitchestolower-carbonalternativesThechangingmixofglobaloilsuppliesisdominatedbytrendsinUStightoilandOPECproductionOil20192025203020352040204520500204060801001202019AcceleratedNewMomentumNetZero203020402050-50-40-30-20-100102030TotaldistancetravelledFueleconomyAlternativefuelsTotal40Mb/dMb/dGlobaloildemandplateausoverthenext10yearsorsobeforedecliningovertherestoftheoutlook,driveninpartbythefallinguseofoilinroadtransportasvehiclesbecomemoreefficientandareincreasinglyfuelledbyalternativeenergysources.OilcontinuestoplayamajorroleintheglobalenergysystemoverthefirsthalfoftheoutlookinAcceleratedandNetZero,withtheworldconsumingbetween70-80Mb/din2035.Thedeclineacceleratesinthesecondhalfoftheoutlook,withoildemandreachingaround40Mb/dinAcceleratedand20Mb/dinNetZeroin2050.OilconsumptioninNewMomentumisstronger,remainingcloseto100Mb/dthroughmuchofthisdecade,afterwhichitdeclinesgraduallytoaround75Mb/dby2050.Oildemandinemergingeconomiesisbroadlyflatorgentlyrisingovermuchofthefirsthalfoftheoutlookacrossthethreescenarios,butthisisoffsetbytheacceleratingdeclinesinoiluseinthedevelopedworld.Thesecontrastingtrendsarereflectedinagradualshiftinthecentreofgravityofglobaloilmarkets,withemergingeconomies’shareofglobaloildemandincreasingfrom55%in2021toaround70%in2050inallthreescenarios.Thesinglebiggestfactordrivingthedeclineinoilconsumptionisthefallinguseofoilwithinroadtransport.Risingprosperityandlivingstandardsinemergingeconomiessupportanincreaseinboththesizeoftheglobalvehicleparcandindistancesdriven,boostingthedemandforoil.Butthisisincreasinglyoffsetbyacombinationoftheroadvehiclefleetbecomingmoreefficientandthegrowingswitchawayfromoiltoalternativeenergysources.LowerdemandforoilinroadtransportaccountsformorethanhalfofthereductionintotaloildemandinAcceleratedthroughouttheoutlook.In2030,thislargelyreflectstheimpactoftheincreasingefficiencyoftheglobalvehiclefleet,whichismorethantwicethatoftheswitchtoalternativeenergysources.By2040thesetwoeffectsarebroadlyequal,andby2050theswitchtoalternativeenergysources,ledbytheincreasingelectrificationofvehicles,accountsformorethantwicetheimpactonoildemandthantheeffectsofgreaterefficiency.41bpEnergyOutlook:2023editionKeypointsOildemandChangeinoildemandinroadtransportversus2019inAcceleratedOildemandfallsovertheoutlookasuseinroadtransportationdeclinesOil2030204020500.00.51.01.52.02.53.020302040205002468101214161820302040205002040608010012014016020302040205002468101214GasHydrogen-derivedfuelsBiofuelsOilproductsGasandLPGHydrogenBatteryelectricPlug-inhybridConventionalICEGasincludesbiomethane42BillionvehiclesMillionvehiclesEJEJTheroleofoilfallsacrossallmodesoftransport,reflectingashifttoalternative,low-carbonenergysources.Thatshiftisdominatedbyelectrificationinroadtransportandbybio-andhydrogen-derivedfuelsinaviationandmarine.Inroadtransportation,thenumberofelectric(includingplug-inhybrid)carsandlight-dutytrucksincreasesfromaround20millionin2021tobetween550-700million(30-35%ofthatvehicleparc)by2035inAcceleratedandNetZero,andtoaround2billionsuchvehicles(around80%)by2050.Electricpassengercarsaccountforthemajorityofnewcarsalesbythemid-2030sinAcceleratedandNetZero,supportedbyacombinationoftighterregulationofvehicleemissions,improvingcostandchoicecompetitivenessofelectriccars,andgrowingpreferenceandacceptabilityamongconsumers.AlthoughtheelectrificationofcarsandlightdutytrucksislessrapidinNewMomentum,therearestillaround500millionsuchvehiclesby2035and1.4billionby2050,withelectricpassengercarsaccountingforaround40%ofnewcarsalesin2035and70%in2050.Thereisalsoaswitchawayfromtherelianceondieselinmedium-andheavy-dutytrucksandbuses,withtheshareofdiesel-basedtrucksintheglobalparcdecliningfromaround90%in2021tobetween70-75%in2035inNetZeroandAcceleratedand5-20%in2050.Themainswitchistoelectrification,buthydrogen-fuelledtrucksalsoplayagrowingrole,especiallyforheavy-duty,long-distanceusecases.Thechoicebetweenelectrificationandhydrogenvariesacrossdifferentcountriesandregionsdependingonpoliciesaffectingtherelativepriceofelectricityandlow-carbonhydrogen,aswellasonregulatorypoliciesandthedevelopmentofchargingandrefuellinginfrastructures.ElectrificationofroadvehiclesisinitiallydominatedbyChina,EuropeandNorthAmerica,whichtogetheraccountforaround60-75%ofthegrowthofelectricroadvehiclesto2035inthethreescenariosand50-60%ofthegrowthto2050.Oilcontinuestodominatetheaviationsectoroverthefirsthalfoftheoutlook,butitssharedeclinestoaround60%ofenergyusedinaviationby2050inAcceleratedand25%inNetZero,offsetbytheincreasinguseofsustainableaviationfuel(SAF).InAccelerated,themajorityoftheSAFisderivedfrombioenergy(biojet).BiojetalsoprovidesmostoftheSAFinNetZero,althoughby2050thereisalsoagreaterroleforhydrogen-derivedfuels(syntheticjetfuel–seepages70-71).Themainalternativetooil-basedproductsinmarineuseisprovidedbyhydrogen-basedfuels(ammonia,methanolandsyntheticdiesel).ThepenetrationofthesefuelsisconcentratedinthesecondhalfoftheoutlookinAcceleratedandNetZero,wheretheyaccountforbetween30%and55%oftotalenergyusedinmarineby2050.Incontrast,oilcontinuestoaccountformorethanthree-quartersofmarineenergydemandin2050inNewMomentum.43bpEnergyOutlook:2023editionKeypointsLightvehiclesHeavyvehiclesAviationMarineTheroleofoilintransportdeclinesastheworldswitchestolower-carbonalternativesOilGlobalvehicleparcinAccelerated:TotalenergyusagebyfuelinAccelerated:Excludinge-bicycles02019-302030-502019-302030-502019-302030-50-4-3-2-11TotalNon-OPEC(excl.Russia)RussiaOPECUStightoilNewMomentumNetZeroAccelerated20002010202020302040205020%30%40%50%60%70%80%AcceleratedNewMomentumNetZero44Averageannualchange,Mb/dShareoftotalThecompositionofglobaloilsuppliesshiftsovertime,asUStightoilgrowsovertherestofthisdecadeafterwhichitdeclinesasthemostproductivelocationsareexhaustedandOPECcompetestoincreaseitsmarketshare.ThereisasustaineddeclineinRussianproduction.UStightoil–includingnaturalgasliquids(NGLs)–growsoverthefirst10yearsorsooftheoutlook,peakingatbetween11-16Mb/daroundtheturnofthisdecadeinallthreescenarios.BrazilianandGuyanaoutputalsoincreasesoverthenext10yearsorso,reachingaround5Mb/dand2Mb/drespectivelybythemid2030s.USproductionfallsthroughthe2030sand40s,asUStightformationsmature,andOPECadoptsamorecompetitivestrategyagainstabackdropofacceleratingdeclinesinoildemand.UStightoildropstoaround2Mb/dorlessinAcceleratedandNetZeroby2050,andtoaround6Mb/dinNewMomentum,wherethepressuresfromfallinglevelsofoveralldemandarelessacute.Russianoutputdeclinesovertheentireoutlook,fallingfromaround11.5Mb/din2019tobetween5.5-6.5Mb/din2035inAcceleratedandNetZeroandto2.5Mb/dorlessby2050.ThereductionsinNewMomentumarelesspronounced,withRussianproductionfallingtoaround8.5Mb/dand7Mb/din2035and2050respectively.OPEC’sproductionstrategyreactstothechangingcompetitivelandscape.OPEClowersitsoutputoverthefirstdecadeoftheoutlookinresponsetothegrowthinUSandothernon-OPECsupplies,acceptingalowermarketsharetomitigatethedownwardpressureonprices.ThefallinOPEC’smarketshareismostpronouncedinAcceleratedandNetZerogiventhebackdropoffallingoildemandfromthemid-2020s.AsthedeclineinoildemandgatherspacethroughthesecondhalfoftheoutlookandthecompetitivenessofUSoutputwanes,OPECcompetesmoreactively,raisingitsmarketshare.OPEC’sshareofglobaloilproductionincreasestobetween45-65%by2050inallthreescenarios.Thehighercoststructureofnon-OPECproductionmeansbetween75-85%ofthefallinoilproductioninAcceleratedandNetZeroby2050,andvirtuallyallthereductioninNewMomentum,isbornebynon-OPECsuppliers.45bpEnergyOutlook:2023editionKeypointsChangeinoilsupplyOPECmarketshareofglobaloilsupplyThechangingmixofglobaloilsuppliesisdominatedbytrendsinUStightoilandOPECproductionOil46ProspectsfornaturalgasdependonthespeedoftheenergytransitionLNGtradeincreasesinthenearterm,withtheoutlookbecomingmoreuncertainpost2030LNGexportsaredominatedbytheUSandtheMiddleEast47bpEnergyOutlook:2023editionNaturalgas200020102020203020402050010002000300040005000AcceleratedNewMomentumNetZero-2500-2000-1500-1000-50005001000TotalHydrogenBuildingsIndustryPowerOtherNewMomentumAcceleratedNetZeroNetZeroAcceleratedNewMomentum2030-20502019-203049bpEnergyOutlook:2023edition48KeypointsBcmChange,BcmNaturalgasdemandChangeinnaturalgasdemandbysectorTheprospectsfornaturalgasdependontheoutcomeoftwosignificantbutopposingtrends:increasingdemandinemergingeconomiesastheygrowandindustrialize,offsetbyashiftawayfromnaturalgastolower-carbonenergyledbythedevelopedworld.Thenetimpactoftheseopposingtrendsonglobalgasdemanddependsonthepaceoftheenergytransition.GlobaldemandfornaturalgasrisesovertherestofthisdecadeinNewMomentumandAccelerateddrivenbystronggrowthinChina–underpinnedbycontinuedcoal-to-gasswitching–andalsobyIndiaandotheremergingAsiaastheyindustrializefurther.Incontrast,naturalgasconsumptioninNetZeropeaksinthemid-2020sbeforethenstartingtodecline.Theuseofgaswithintheemergingworldgrowsoutto2030.Butthisgrowthisoutweighedbyfallingconsumptioninthedevelopedworld,giventheshifttowardselectrificationandlowercarbonenergy.Fromtheearly2030sonwards,naturalgasdemanddeclinesinAcceleratedandNetZeroasthesustaineddeclineinitsuseinthedevelopedworldiscompoundedbyfallingdemandinChinaandtheMiddleEast,drivenbythesamepatternsofincreasingelectrificationandrapidgrowthinrenewableenergy.Thedeclineisonlypartiallyoffsetbythegrowinguseofnaturalgastoproducebluehydrogen(seepages72-73).By2050,naturalgasdemandisaround40%lowerthan2019levelsinAcceleratedand55%lowerinNetZero.Incontrast,globalnaturalgasdemandinNewMomentumcontinuestogrowformuchoftheperiodoutto2050,drivenbygrowinguseinemergingAsiaandAfrica.Muchofthisgrowthisinthepowersectorastheshareofnaturalgasconsumptioninpowergenerationintheseregionsgrowsandoverallpowergenerationincreasesrobustly.GlobalnaturalgasdemandinNewMomentumin2050isaround20%above2019levels.Therangeofthedifferenceinglobalgasdemandin2050acrossthethreescenariosrelativetocurrentlevelsisgreaterthanforeitheroilorcoal,highlightingthesensitivityofnaturalgastothespeedoftheenergytransition.ProspectsfornaturalgasdependonthespeedoftheenergytransitionNaturalgas2019020040060080010001200DevelopedAsiaEuropeOtheremergingOtheremergingAsiaIndiaChina20502030NetZeroAcceleratedNetZeroAcceleratedNewMomentumNewMomentum200020102020203020402050020040060080010001200AcceleratedNewMomentumNetZero51bpEnergyOutlook:2023edition50KeypointsLNGtradeLNGimportsbyregionBcmBcmLNGtradeincreasesrobustlyintheneartermbuttherangeofuncertaintywidenspost2030,withcontinuingdemandforLNGinemergingmarketsastheygrowandindustrialize,offsetbyfallingimportdemandindevelopedmarketsastheytransitiontolowercarbonenergysources.LNGtradegrowsstronglyoverthefirst10yearsoftheoutlook,increasingbyaround60%inNewMomentumandAcceleratedandbyathirdinNetZero.MuchofthisgrowthisdrivenbyincreasinggasdemandinemergingAsia(China,India,andotheremergingAsia)asthesecountriesswitchawayfromcoaland,outsideofChina,continuetoindustrialize.LNGimportsarethemainsourceforthisgrowinguseofnaturalgas,accountingfor65-75%oftheincreaseingasconsumedinemergingAsiaoutto2030acrossthethreescenarios.EuropeanLNGimportsalsoincreasemateriallyoutto2030inNewMomentumandAccelerated,reflectingthefallinRussianpipelineimportsandpersistentnaturalgasdemand(seepages34-35).TherangeofuncertaintyinLNGtradeincreasesmateriallypost2030.ImportsofLNGincreasebyaround30%between2030and2050inNewMomentum,whereastheyfallbyaround40%overthesameperiodinAcceleratedandNetZero.ThegrowthinLNGdemandpost-2030inNewMomentumisdrivenbyincreasingdemandfromIndiaandotheremergingmarkets,reflectingtheincreasinguseofnaturalgasinthepowerandindustrialsectors(seepages48-49).ThisgrowthintheemergingworldmorethanoffsetsdecliningLNGimportsinEuropeanddevelopedAsianmarkets.LNGdemandinemergingeconomiesalsogrowsformuchoftheperiodpost-2030inAcceleratedandNetZero,butthisismorethanoffsetbysharpfallsinLNGimportsindevelopedAsianandEuropeanmarketsandinChina,astheseregionsswitchawayfromnaturalgastolowercarbonenergysources.ThesizeoftheLNGmarketin2050isroughlydoubleits2019levelinNewMomentum,broadlyunchangedinAccelerated,andisaround30%lowerinNetZero.LNGtradeincreasesinthenearterm,withtheoutlookbecomingmoreuncertainpost2030Naturalgas020040060080010001200OtherAfricaAustraliaRussiaMiddleEastUS203020192050NetZeroAcceleratedAcceleratedNewMomentumNetZeroNewMomentumAcceleratedNetZeroNewMomentum2019EO22EO23EO22EO23EO22EO2302040608010012014016018053bpEnergyOutlook:2023edition52KeypointsBcmBcmLNGexportsbyregionRussiaLNGexportsin2050TheUSandMiddleEastestablishthemselvesasthemainglobalsupplyhubsforLNGexports,withtheprospectsforRussianLNGexportsscarredbytheeffectsoftheRussia-Ukrainewar.ThegrowthinglobalLNGdemandoutto2030ismetbyasubstantialexpansionofexportsfromtheUSandQatar.GrowthinUSLNGexportsaccountformorethanhalfoftheincreaseinglobalLNGsuppliesoutto2030inNewMomentumandAcceleratedandaroundtwo-thirdsofoverallgrowthinNetZero.GrowingexportsfromtheMiddleEastaccountformuchoftheremainder.By2030,theUSandtheMiddleEasttogetheraccountforaroundhalfofglobalLNGsupplies,comparedwitharoundathirdin2019.ThefallinLNGexportsinthesecondhalfoftheoutlookinAcceleratedandNetZeroisbornedisproportionatelybytheUS.USLNGexportsfallbymorethanahalfbetween2030and2050inthesetwoscenarios,reflectingtheincreasingcompetitionandthehighertransportcostsforUSsuppliestotheremainingdemandcentresinAsiarelativetothecostofLNGfromtheMiddleEastandAfrica.AustralianLNGexportsdeclinepost-2030inallthreescenariosreflectingincreasingcostsandconstraintsonupstreamnaturalgasproductioninAustralia.RussianLNGexportsoutto2030areconstrainedbycontinuingrestrictionsonRussia’saccesstowesterntechnologyandfunding.Assuch,Russianexportsoverthefirstdecadeoftheoutlookarebroadlyflat,withonlythoseprojectsclosetocompletionbeforethestartofthewarassumedtostartup.TheconstraintsonRussia’saccesstotechnologyandfundingareassumedtoeasegraduallypost-2030,allowingRussianLNGexportstomorethandoubleby2050inNewMomentum.Incontrast,thefallsinglobalLNGdemandinthe2030sand40sinAcceleratedandNetZeromeansthatRussianLNGexportsdonothaveachancetorecoverevenassanctionsareeased.RussianLNGexportsarebetween10-60Bcmlowerin2035and15-50Bcmlowerin2050acrossthethreescenariosthaninlastyear’sEnergyOutlook(seepages32-33).LNGexportsaredominatedbytheUSandtheMiddleEastNaturalgas5455bpEnergyOutlook:2023editionWindandsolarpowerexpandsrapidly,requiringsignificantaccelerationinfinancingandbuildingnewcapacityModernbioenergyexpandsrapidly,helpingtodecarbonizehard-to-abatesectorsandprocessesRenewableenergy2000201020202030204020500500010000150002000025000AcceleratedNewMomentumNetZeroUSEUChinaIndiaRestofWorld050100150200250Maximumhistoricalbuildrate56GWGWperyearWindandsolarpowerexpandsrapidly,drivenbyincreasingcostcompetitivenessandpoliciessupportingashifttolow-carbonelectricityandgreenhydrogen.Windandsolarinstalledcapacityincreasesbyaround15foldovertheoutlookinAcceleratedandNetZeroand9foldinNewMomentum.Mostofthiscapacityprovideselectricityforfinalconsumption,althougharoundaquartertoathirdofthecapacityby2050inAcceleratedandNetZeroisusedtoproducegreenhydrogen.Therapidexpansioninwindandsolarpowerislargelyunderpinnedbyfallsintheircosts–whichresumeafterrecentshort-terminflationpressures,especiallyoverthefirst10-15yearsoftheoutlook.Solarandwindtechnologyandproductioncostsfallwithgrowingdeployment,supportedbyincreasesinmoduleefficiency,loadfactorsandprojectscalesforsolar,andbyhigherloadfactorsofincreasinglylargeturbinesandloweroperatingcostsforwind.Thepaceofcostreductionsslowsandeventuallyplateausinthefinaltwodecadesoftheoutlookasfallinggenerationcostsareoffsetbythegrowingexpenseofbalancingpowersystemswithincreasingsharesofvariableenergysources.Theoutlookforcostsassumesthattheavailabilityofthecriticalmetalsusedinthemanufacturingofphotovoltaicmodulesandwindturbinesincreasessufficientlytoavoidasustainedincreaseinprices(seepages84-85).Moregenerally,thescenariosareunderpinnedbyanassumptionthatsupplychainsdevelopandexpandsoastoavoidexcessivedependenceonindividualcountriesorregionsforkeymaterials,andthechallengesaroundthesecurityofsupplyofcriticalmaterialsthatmightimply.Theexpansionininstalledcapacityby2035requiresasignificantaccelerationofthepaceatwhichnewcapacityisfinancedandbuilt.TheaveragerateofincreaseininstalledcapacityinAcceleratedandNetZerooutto2035is450-600GWperyear–around1.9to2.5timesfasterthanthehighestrateofincreaseseeninthepast.Inadditiontoasignificantincreaseininvestment(seepages82-83),thisrapidaccelerationinthedeploymentofwindandsolarcapacitydependsonanumberofenablingfactorsscalingatacorrespondingpace,includingtheexpansionoftransmissionanddistributioncapacity,developmentofmarketframeworkstomanageintermittency,thespeedofplanningandpermitting,andtheavailabilityofroute-to-marketmechanisms.Thegrowthininstalledwindandsolarcapacityoutto2035isdominatedbyChinaandthedevelopedworld,eachofwhichaccountsfor30-40%oftheoverallincreaseincapacityinallthreescenarios.Thispatternofgrowthswitchessignificantlyinthesecondhalfoftheoutlook,withemergingeconomiesexcludingChinaaccountingforaround75-90%ofthegrowthinthe2040sinAcceleratedandNetZero.57bpEnergyOutlook:2023editionKeypointsInstalledwindandsolarcapacityRangeofwindandsolarcapacitybuildratesinthethreescenarios2022-2035Windandsolarpowerexpandsrapidly,requiringsignificantaccelerationinfinancingandbuildingnewcapacityRenewableenergy2019ModernsolidBiofuelsBiomethaneTraditional2050020406080100TraditionalModernsolidBiofuelsBiomethaneHeatandpowerHydrogenTransportIndustryBuildings2019HydrogenHeatandpowerTransportIndustryBuildings205002040608010058EJEJTheuseofmodernbioenergy–modernsolidbiomass(suchaswoodpellets),biofuelsandbiomethane–increasessignificantly,helpingtodecarbonizehard-to-abatesectorsandprocesses,anddisplacingtheuseoftraditionalbiomass–suchaswastewoodandagriculturalresidues–forcookingandheating.ThereisasubstantialshiftfromtraditionaltomodernbioenergyinAcceleratedandNetZero,withmodernbioenergymorethandoublingtoreacharound65EJby2050,morethanoffsettingthephasingoutoftraditionalbiomass.GrowthofmodernbioenergyinNewMomentumisslightlylesspronounced,reachingcloseto50EJby2050.Theexpansioninmodernbioenergyisachievedwithoutanychangeinlanduse,withthevastmajoritysourcedregionallythroughresidues(fromagricultureandforestry)andwasteswhichareaccessiblewithoutdetrimentaleffecttotheirecosystems.Thelargestgrowthindemandformodernbioenergyisinsolidbiomass.Biomassisusedmainlyinthepowersector,withitsuseinthissectoralmosttriplingovertheoutlookinAccelerated.Muchoftheremainderisusedtohelpdecarbonizehard-to-abateindustrialprocesses,especiallyincementandsteelmanufacturing.InAccelerated,5EJofbiomassisusedinconjunctionwithcarboncaptureandstorage(BECCS)by2050,predominantlyinthepowerandindustrialsectors.ThisuseofBECCSinthepowersectorisconcentratedinthedevelopedworld.Withinemergingeconomies,biomassinthepowersectorisusedinnewbiomasscogenerationplantsandinco-firingplantswithcoal.TheuseofBECCSgloballyinNetZeroisgreatestreaching13EJin2050,aroundhalfofwhichisdeployedinthepowersector,withmuchoftheremainderusedtoproducehydrogen.TheproductionofbiofuelsroughlytriplesinAcceleratedandNetZeroby2050toaround10EJ,withmostofthesefuelsbeingusedintheaviationsector.By2050,bio-derivedsustainableaviationfuel(biojet)accountsfor30%oftotalaviationdemandinAcceleratedand45%inNetZero,with50-60%ofthegrowthinbiojetintheUSandEurope,supportedbyincreasingincentivesandmandates.Biomethanegrowssignificantlyinallscenarios,fromlessthan0.2EJin2019tobetween6-7EJinAcceleratedandNetZeroby2050and4.3EJinNewMomentum.Biomethaneisblendedintothenaturalgasgridasadirectsubstitutefornaturalgasandissharedbroadlyequallyacrossindustry,buildings,andtransport.Incontrasttomodernbioenergy,theroleoftraditionalbiomassislargelyphasedoutby2050inAcceleratedandNetZero.Thatlargelyreflectsitscurrentuseinbuildingsinemergingeconomiesdisappearingasaccesstoelectricityandclean-cookingfuelsincreases.TheuseoftraditionalbiomassismorepersistentinNewMomentumreflectingtheslowerelectrificationofenergysystemsinemergingeconomies.Thegrowthofmodernbioenergyinallthreescenariosisdominatedbyemergingeconomies,whichaccountforaroundthreequartersofthegrowthto2050inallthreescenarios.59bpEnergyOutlook:2023editionKeypointsBioenergysupplybytypeinAccelerated(2019-2050)BioenergydemandbysectorinAccelerated(2019-2050)Modernbioenergyexpandsrapidly,helpingtodecarbonizehard-to-abatesectorsandprocessesRenewableenergy6061bpEnergyOutlook:2023editionElectricitydemandexpandssignificantlyasprosperityinemergingeconomiesgrowsandtheworldincreasinglyelectrifiesTheglobalpowersystemdecarbonizes,ledbytheincreasingdominanceofwindandsolarpowerThemixofpowergenerationdiffersbetweendevelopedandemergingeconomiesElectricityTransportIndustryBuildings0%20%40%60%80%100%2019NewMomentumNetZeroAccelerated2000202020302040205020100%10%20%30%40%50%60%AcceleratedNewMomentumNetZero62ShareShareoftotalfinalconsumptionElectricitydemandgrowsrobustlyovertheoutlook,drivenbygrowingprosperityinemergingeconomiesandincreasingelectrificationoftheglobalenergysystem.Finalelectricitydemandincreasesbyaround75%by2050inallthreescenarios.Thevastmajorityofthisgrowth(around90%)isaccountedforbyemergingeconomiesasrisingprosperityandlivingstandardssupportarapidexpansionintheuseofelectricity.Indevelopedmarkets,theincreasingelectrificationofendenergyusesunderpinssomegrowthinelectricityconsumption.Butthisgrowthisverymodestcomparedwiththatinemergingeconomies.ElectricitydemandinIndiagrowsbybetween250-280%overtheoutlookacrossthethreescenarios,comparedwith10-30%intheEU.Evenso,electricityconsumptionpercapitaintheEUin2050isstillarounddoublethatinIndia.TheincreasingelectrificationoftheenergysystemismostpronouncedinAcceleratedandNetZero,withtheshareofelectricityintotalfinalconsumption(TFC)increasingfrom20%in2019tobetween40-50%by2050.Despitetheslowerpaceofdecarbonization,theshareofelectricityinTFCinNewMomentumstillincreasestoover30%bytheendoftheoutlook.Theincreaseinelectrificationisapparentacrossall-end-usesectors.Thegreatestscopeforelectrificationisinbuildings,whereatleasthalfoffinalenergydemandiselectrifiedby2050inallthreescenarios.Thehigherdegreeofelectrificationofbuildings’energydemandinAcceleratedandNetZeroislargelydrivenbythegreateradoptionofheatpumps.Thetransportsectorhasthelargestincreaseintheshareofelectrificationrelativetoitscurrentlowlevel,largelyreflectingtheelectrificationofroadtransport(seepages42-43).Comparedwiththeothersectors,thescopeforsignificantincreasesintheelectrificationoffinalenergyuseinindustryismorelimited,particularlyforprocessesrequiringhightemperatures(>200ºC).63bpEnergyOutlook:2023editionKeypointsElectricityasashareoftotalfinalconsumptionRangeofelectrificationacrossend-usesectorsin2050ElectricitydemandexpandssignificantlyasprosperityinemergingeconomiesgrowsandtheworldincreasinglyelectrifiesElectricity20190100002000030000400005000060000700002050NewMomentumAcceleratedNetZeroOtherOtherlow-carbonNuclearWindandsolarCoalGas200020102020203020402050-20002004006008001000Emerging(excl.China)DevelopedChina64TWhgCO2/kWhGlobalpowergenerationdecarbonizes,enabledbyrapidgrowthinwindandsolarpowerwhichaccountsforallormostoftheincreaseinpowergenerationovertheoutlook.By2050,windandsolarpoweraccountforaroundtwo-thirdsofglobalpowergeneration–andcloserto75%inthemostadvantagedregions–inAcceleratedandNetZero.Thatshareisaroundahalfby2050inNewMomentum.Althoughdirectelectricityconsumptionissimilaracrossthethreescenarios(seepages18-19),totalpowergenerationishigherinAcceleratedandNetZero,withanadditional15-20%oftotalgenerationby2050usedtoproducegreenhydrogen(seepages72-73).Othersourcesoflow-carbonpowergeneration(nuclear,hydro,bioenergyandgeothermal)continuetoplayasignificantrole,accountingforaround25%ofglobalpowergenerationin2050inAcceleratedandNetZero,similartotheirsharein2019.Withinthat,nuclearpowergenerationincreasesbyaround80%by2050inAcceleratedandmorethandoublesinNetZero.InvestmentinnewnuclearcapacityisconcentratedinChina–whichaccountsfor50-65%ofthegrowthinnuclearpowerinAcceleratedandNetZero–supportedbynewcapacityinotheremergingeconomiesandanextensionoflifetimesandrestartingofexistingplantsinsomedevelopedeconomies.Coalisthefuelthatlosesmostgroundtotheincreasingdominanceoflow-carbonpower,asitsshareinglobalpowergenerationfallsfromcloseto40%in2019toalittleover10%inNewMomentumby2050andclosetozeroinAcceleratedandNetZero.TheroleofnaturalgasinglobalpowergenerationisrelativelystableoverthefirstpartoftheoutlookinAcceleratedandNewMomentum,givenitscontinuingimportanceintheemergingworld.ButitsusedeclinessharplyinthesecondhalfoftheoutlookinAcceleratedandNetZeroastheexpansionofwindandsolarpowergatherspace.In2050,60-95%oftheremaininggas-firedpowergenerationinAcceleratedandNetZeroisusedinconjunctionwithcarboncapture,useandstorage(CCUS,seepages76-77).Inthesecondhalftheoutlook,low-carbonhydrogenalsoemergesasafuelinthepowersector:althoughitsoverallshareofgenerationisverysmall,itplaysanimportantroleasdispatchablelow-carbonpowerinelectricitysystemswithahighshareofsolarandwind.Theincreasingdominanceoflow-carbonenergy,togetherwiththeuseofCCUS,causecarbonemissionsfrompowergenerationinAcceleratedtofallbyaround55%by2035andtobevirtuallyeliminatedby2050.ThereductioninthecarbonintensityofglobalpowergenerationoverthefirstpartoftheoutlookisledbythedevelopedworldandChina,withemergingeconomiescatchingupoverthesecondhalfoftheperiod.SimilartrendsarealsoapparentinNetZero,wherethegreateruseofbioenergycombinedwithCCUSresultsinthepowersectorbeingasourceofnegativeemissionsby2050.65bpEnergyOutlook:2023editionKeypointsElectricitygenerationbyfuelCarbonintensityofpowergenerationinAcceleratedTheglobalpowersystemdecarbonizes,ledbytheincreasingdominanceofwindandsolarpowerElectricity0500010000150002000025000300002019-302030-50NewMomentumAcceleratedNetZeroAcceleratedNetZeroNewMomentum-8000-6000-4000-2000020002019-302030-50NewMomentumAcceleratedNetZeroAcceleratedNetZeroNewMomentum-4000-20000200040002019-302030-50NewMomentumAcceleratedNetZeroAcceleratedNetZeroNewMomentumDevelopedChinaEmerging(excl.China)Total66TWhTWhTWhTheenergysourcesusedtofuelthegrowthinpowergenerationvaryacrossdevelopedandemergingeconomies,reflectingdifferencesintheirstagesofdevelopmentandinthematurityandsizeofpowergenerationmarkets.GrowthinwindandsolargenerationovertherestofthisdecadeisdominatedbyChinaandthedevelopedworld,whichtogetheraccountfor80-85%ofthegrowthinwindandsolarpoweroutto2030inthethreescenarios.Thissharedeclinesto35-60%intheperiodafter2030asthegrowthinrenewablepowergenerationinemergingeconomies(excludingChina)risessharply,underpinnedbystronggrowthinpowerdemandandtheincreasingabilityofthesemarketstosupportarapidbuildoutofwindandsolarcapacity.Thegrowthingas-firedpowergenerationovertherestofthecurrentdecadeisconcentratedinemergingeconomies.InAcceleratedandNetZero,theincreaseingas-firedpowergenerationandtherapidexpansioninwindandsolarpowerfacilitateamodestreductionincoalgenerationby2030inemergingeconomies.Thathigherlevelofgas-firedpowergenerationisrelativelyshort-livedinAcceleratedandNetZero,asthepushtodecarbonizethepowersector,ledbyasharpaccelerationinwindandsolarpowergeneration,triggersareductioninbothgas-andcoal-firedgenerationafter2030.Incontrast,theslowergrowthinpowerdemandindevelopedeconomies,togetherwithrobustincreasesinrenewablepowergeneration,causegas-firedgenerationinthedevelopedworldtoplateauinthenextfewyearsinNetZeroandAcceleratedbeforedecliningthereafter.Themovetodecarbonizethepowersectorcausescoal-firedgenerationtodecreasemarkedlyinallregionsinAcceleratedandNetZero.TheuseofcoalismorepersistentinNewMomentum,withasmallincreaseincoalgenerationinChinaandotheremergingeconomiesovertherestofthisdecade.ButthatriseismorethanreversedbyasharpfallinChinesecoalgenerationinthefinal20yearsoftheoutlook.Atagloballevel,thefallintotalcoal-firedgenerationisdominatedbyChina,whichexplainsaroundhalfofthetotaldeclineinAcceleratedandNetZeroandmorethanthetotalinNewMomentum.67bpEnergyOutlook:2023editionKeypointsChangeingenerationbysourceandregionGaspowerWindandsolarCoalpowerThemixofpowergenerationdiffersbetweendevelopedandemergingeconomiesElectricity68Low-carbonhydrogenLow-carbonhydrogenplaysacriticalroleinhelpingtheenergysystemtodecarbonizeLow-carbonhydrogenisdominatedbygreenandbluehydrogen,withtradeinhydrogenamixofregionalpipelinesandglobalshipping69bpEnergyOutlook:2023edition0501001502002500100200300400500NetZeroAcceleratedNetZeroAcceleratedNetZeroAcceleratedNetZeroAccelerated2030205020302050Roadheavy(hydrogen-derivedfuels)Roadandrail(purehydrogen)Marine(hydrogen-derivedfuels)Aviation(hydrogen-derivedfuel)OtherTransportIndustryFeedstocksOtherincludeshydrogendemandforpower,heating,andbuildings70MtMtTheuseoflow-carbonhydrogengrowsastheworldtransitionstoamoresustainableenergysystem,helpingtodecarbonizehard-to-abateprocessesandactivitiesinindustryandtransport.Theuseoflow-carbonhydrogenismostpronouncedinAcceleratedandNetZero,complementinggrowingelectrificationoftheenergysystembyactingasacarrieroflow-carbonenergyforactivitiesthataredifficulttoelectrify.ThelowerdegreeofdecarbonizationinNewMomentummeanslow-carbonhydrogenplaysarelativelylimitedrole.Thegrowthoflow-carbonhydrogenduringthefirstdecadeorsooftheoutlookisrelativelyslow,reflectingboththelongleadtimestoestablishlow-carbonhydrogenprojectsandtheneedforconsiderablepolicysupporttoincentivizeitsuseinplaceoflower-costalternatives.Thedemandforlow-carbonhydrogenby2030isbetween30-50MtpainAcceleratedandNetZero,themajorityofwhichisusedasalowercarbonalternativetotheexistingunabatedgas-andcoal-basedhydrogenusedasanindustrialfeedstockinrefiningandtheproductionofammoniaandmethanol.Thepaceofgrowthacceleratesinthe2030sand2040sasfallingcostsofproductionandtighteningcarbonemissionspoliciesallowlow-carbonhydrogentocompeteagainstincumbentfuelsinhard-to-abateprocessesandactivities,especiallywithinindustryandtransport.Demandforlow-carbonhydrogenrisesbyafactorof10between2030and2050inAcceleratedandNetZero,reachingcloseto300and460Mtpa(35-55EJ)respectively.Theuseoflow-carbonhydrogeninironandsteelproductionaccountsforaround40%oftotalindustrialhydrogendemandby2050inAcceleratedandNetZero,whereitactsasanalternativetocoalandnaturalgasasbothareducingagentandasourceofenergy.Theremainingindustrialuseofhydrogenisinotherpartsofheavyindustry,suchaschemicalsandcementproduction,whichalsorequirehigh-temperatureheatprocesses.By2050,low-carbonhydrogenaccountsforaround5-10%oftotalfinalenergyusedinindustryinAcceleratedandNetZero.Theuseofhydrogenwithintransportisheavilyconcentratedintheproductionofhydrogen-derivedfuelsusedtodecarbonizelong-distancetransportationinmarine(intheformofammonia,methanol,andsyntheticdiesel)andinaviation(intheformofsyntheticjetfuel).Thesehydrogen-derivedfuelsaccountforbetween10-30%offinalaviationenergydemandby2050and30-55%offinalenergyuseinthemarinesectorinAcceleratedandNetZero.Mostoftheremainderisuseddirectlyinheavydutyroadtransport.By2050,low-carbonhydrogenandhydrogen-derivedfuelsaccountforbetween10-20%oftotalfinalenergyusedbythetransportsectorinAcceleratedandNetZero.Theproductionofsomehydrogenderivedfuelsrequiressourcesofcarbon-neutralfeedstocks.Thesecanbederivedfromeitherbiogenicsourcesorfromdirectaircapture(seepages78-79).Low-carbonhydrogen71bpEnergyOutlook:2023editionKeypointsLow-carbonhydrogendemandLow-carbonhydrogendemandintransportLow-carbonhydrogenplaysacriticalroleinhelpingtheenergysystemtodecarbonize010020030040050020502030NetZeroAcceleratedNetZeroAcceleratedBiogenichydrogenBluehydrogenGreenhydrogen0102030405020302050NetZeroAcceleratedNetZeroSeaborneimports(hydrogenderivatives)DomesticproductionPipelineimports(purehydrogen)Accelerated72MtMtLow-carbonhydrogenisdominatedbyacombinationofgreenhydrogen,madeviaelectrolysisusingrenewablepower,andbluehydrogen,madefromnaturalgas(orcoal)withtheassociatedcarbonemissionscapturedandstored.Hydrogentradeoccursviaregionalpipelinesorglobalshippingdependingontheforminwhichthehydrogenisused.Atpresent,thecostofproducingbluehydrogenisgenerallylowerthanforgreenhydrogeninmostpartsoftheworld.However,thecombinationofrecentpolicyinitiatives(suchastheInflationReductionActintheUS–seepages36-37)andhighernaturalgaspricesinEuropeandAsiaasaresultoftheRussia-Ukrainewar(seepages34-35)hasreducedthiscostadvantageinsomecountriesandregions.Thiscostdifferentialisfurthererodedovertheoutlookasimprovementsintechnologyandmanufacturingefficiencylowerthepriceofbothrenewablepowerandelectrolysers.Asaresult,greenhydrogenaccountsforaround60%oflow-carbonhydrogenin2030inAcceleratedandNetZero,withthatshareincreasingtoaround65%by2050.Mostoftheremaininghydrogenisprovidedbybluehydrogen,withasmallamountproducedfrombioenergycombinedwithcarboncaptureandstorage(BECCS).Bluehydrogenactsasanimportantcomplementtogreenhydrogenproviding,alower-costalternativeinsomeregionsaswellasprovidingasourceoffirm(non-variable)low-carbonhydrogensupply.Thegrowthofbluehydrogenalsoreducestheextenttowhichrenewableenergyisdivertedfromdecarbonizingelectricitythatisconsumeddirectly.Thenatureofhydrogentradeislikelytovarydependingonitsfinaluse.Foractivitiesandprocessesthatrequirehydrogeninitspureform–suchasforhightemperatureheatprocessesinindustryorforuseinroadtransport–thegasislikelytobeimportedviapipelinesfromregionalmarkets,reflectingthehighcostofshippingpurehydrogen.Incontrast,foractivitiesthatcanusehydrogenderivatives,suchasammoniaandmethanolinmarineorhydrogen-derivedhotbriquettediron(HBI)inironandsteelmanufacturing,thelowercostofshippingthesederivativesallowsimportsfromthemostcost-advantagedlocationsglobally.Forexample,theEUproducesaround70%ofthelow-carbonhydrogenitusesin2030inAcceleratedandNetZero,withthatsharefallingtoaround60%by2050.Ofthelow-carbonhydrogenitimports,aroundhalfistransportedaspurehydrogenviapipelinefromNorthAfricaandotherEuropeancountries(NorwayandtheUK);andtheotherhalfisimportedbyseaintheformofhydrogenderivativesfromglobalmarkets.Low-carbonhydrogen73bpEnergyOutlook:2023editionKeypointsGloballow-carbonhydrogensupplySourcesofEUlow-carbonhydrogenLow-carbonhydrogenisdominatedbygreenandbluehydrogen,withtradeinhydrogenamixofregionalpipelinesandglobalshipping7475bpEnergyOutlook:2023editionCarboncapture,useandstorageplaysacentralroleinenablingdeepdecarbonizationpathwaysCarbondioxideremovalisnecessarytoachievetheParisclimategoalsCarbonmitigationandremovalsIndustrialprocessemissionsBECCSCoalGas20352050203520502035205001000200030004000500060007000NewMomentumNetZeroAcceleratedDevelopedOtheremergingIndiaChina01000200030004000500060007000NewMomentumNetZeroAccelerated20352050203520502035205076MtCO2MtCO2Carboncapture,useandstorageplaysacentralroleinsupportingthetransitiontoalow-carbonenergysystem:capturingindustrialprocessemissions,actingasasourceofcarbondioxideremoval,andabatingemissionsfromtheuseoffossilfuels.Carboncapture,useandstorage(CCUS)reachesbetween4-6GtCO2by2050inAcceleratedandNetZero,comparedwith1GtCO2inNewMomentum.ThelongleadtimesassociatedwithdevelopingstoragesitesandtheirrelatedtransportinfrastructuremeansthatmostofthiscapacityiscompletedinthesecondhalfoftheOutlook.Inallthescenarios,around15%oftheCCUSoperatingin2050isusedtocaptureandstorenon-energyprocessemissionsfromcementproduction,whichhaslimiteddecarbonizationalternatives.TheuseofCCUSwithbioenergy(BECCS)providesbothasourceofenergyandaformofcarbondioxideremoval(seepages78-79).BECCSaccountsforaround10%ofCCUSinNewMomentumandAcceleratedin2050andaround20%inNetZero.TheremainingCCUSisutilizedtoabateemissionsfromtheuseofnaturalgasandcoal.InAcceleratedandNetZero,thedeploymentofCCUSwithnaturalgasisspreadbroadlyequallyacrosstheuseofnaturalgastoproducebluehydrogen(seepages72-73),toabateemissionsinthepowersectorandtocaptureemissionsfromthecombustionofgasinindustry.ThegreatestuseofCCUSwithnaturalgasoccursintheUS,followedbytheMiddleEast,Russia,andChina–whichcombinedaccountforaroundtwo-thirdsofCCUSdeployedwithnaturalgasin2050inAcceleratedandNetZero.ThevastmajorityofCCUSwithcoalisusedinregionswithrelativelynewcoal-basedassetsinthepowerandsteelsectors,largelyinemergingAsia,ledbyChina.InAcceleratedandNetZero,over70%oftheglobaldeploymentofCCUSin2050isinemergingeconomies,ledbyChinaandIndia.Thisrequiresaveryrapidscale-upofCCUSinthesecountriesrelativetotheirhistoricallevelsofoilandgasproduction,whichcanbeusedasanindicatorofthegeologicalsuitabilityandengineeringcapabilitytodevelopindustrialscaleCCUSfacilities.77bpEnergyOutlook:2023editionKeypointsCarboncapture,useandstoragebyemissionssourceCarboncapture,useandstoragebyregionCarboncapture,useandstorageplaysacentralroleinenablingdeepdecarbonizationpathwaysCarbonmitigationandremovalsLaneetal.(2021):UncertainstorageprospectscreateaconundrumforcarboncaptureandstorageambitionsBECCSDACCSNCS020406080100120140BECCSDACCSNCS1.5°C2°C2020202520302035204020452050-8-6-4-20BECCSNCSMaximumandminimumofbarsare10thand90thpercentilesofIPCCscenarios78GtCO2GtCO2TheIPCC,initsSixthAssessmentReport,statedthatcarbondioxideremoval(CDR)isnecessarytocounteracthard-to-abateemissionsandachievetheParisclimategoals.ThisincludesbioenergycombinedwithCCUS,naturalclimatesolutions,anddirectaircarboncapturewithstorage.BioenergycombinedwithCCUS(BECCS)hasthebenefitthatitgeneratesusefulenergyaswellasnegativecarbonemissions.However,theextenttowhichitcanbescaledislimitedbytheneedtoensurethesustainabilityofthebiomassusedandbythecompetitionwithotherpriorityusesforthatbiomass.Naturalclimatesolutions(NCS)conserve,restoreormanageforests,wetlands,grasslandsandagriculturallandstoincreasecarbonstorageoravoidgreenhousegasemissions.Indoingso,NCScaneitherreduceCO2emissionsorremoveCO2alreadyintheatmosphere.NCScanhaveimportantco-benefits,suchaspromotingbiodiversity,butcanfacechallengesinensuringandmonitoringtheireffectivenessandpermanence.Directaircarboncapturewithstorage(DACCS)isaprocessofcapturingCO2directlyfromambientairandthenstoringit.DACCShastheadvantagethatithasthepotentialtobescaledmaterially,locatedinthemostadvantagedregions,andprovideconsiderablecertaintyonpermanenceandadditionality.However,thecurrentcostsofDACCSarehighrelativetootherformsofCDR,reflectingbothitsrelativelylowtechnologicalmaturityanditsinherenthighenergyrequirements.TheuncertaintiesassociatedwithallformsofCDRmeansthattheIPCCscenariosincludedintheSixthAssessmentReportincludearangeofoutcomesforthedifferenttypesofCDR.Butallhighlighttheneedfortenstohundredsofgigatonscumulativelyoutto2050.ThemedianIPCC1.5ºCscenarioincludesarapidscale-upofbothNCSandBECCS,reachingover7GtCO2perannumby2050.ThepaceatwhichtheseformsofCDRgrowmeanstheyhelptoacceleratethepaceofdecarbonizationovercomingdecades,aswellasoffsethard-to-abateemissionsinanetzerosystem.AlthoughfewofthemodelledpathwaysincludedintheIPCC’sSixthAssessmentReportembodyamaterialroleforDACCS,morerecentanalysisbytheIEAandtheEnergyTransitionsCommissionenvisagealargerroleforit.SyntheticfuelCO2feedstockrequirementTheproductionofsomehydrogen-derivedfuels-primarilysyntheticjetfuel,butalsosyntheticdieselandmethanol(seepages42-43)–requireacarbon-neutralfeedstock.Thiscanbesourcedfromeitherbioenergywithcarboncaptureordirectaircapture.AlthoughthesourceisnotexplicitlymodelledintheOutlook,theCO2requirementforhydrogen-derivedfuelsby2050isaround200and500MtpaforAcceleratedandNetZero,respectively.79bpEnergyOutlook:2023editionKeypointsCumulativecarbondioxideremovalinIPCCscenarios:2015-2050AnnualcarbondioxideremovalinmedianIPCC1.5°CscenarioCarbondioxideremovalisnecessarytoachievetheParisclimategoalsCarbonmitigationandremovalsInternationalEnergyAgency,WorldEnergyOutlook2022;EnergyTransitionsCommission,MindtheGap:HowCarbonDioxideRemovalsMustComplementDeepDecarbonizationtoKeep1.5°CAlive,March20228081bpEnergyOutlook:2023editionInvestmentinwindandsolarcapacityincreasessharplyandcontinuesinoilandnaturalgasTheenergytransitionleadstoasignificantincreaseinthedemandforcriticalmineralsInvestmentandcriticalminerals02004006008002020-202102004006008002020-20212022-20302031-20502022-20302031-2050NetZeroNewMomentumAccelerated82Theenergytransitionrequiressubstantiallevelsofinvestmentacrossawiderangeofenergyvaluechains.Theimpliedlevelofinvestmentinwindandsolarcapacityacceleratesmarkedlyfromrecentlevels.Despitedeclininglevelsofdemand,continuinginvestmentinupstreamoilandnaturalgasisalsorequired.Theinvestmentestimatesconsideredhererefertoinvestmentsinwindandsolarcapacityandinupstreamoilandgasproduction.Theassumptionsunderlyingtheimpliedinvestmentrequirements,andtheassociateduncertainties,aredescribedintheAnnex(seepages94-95).Theenergypathwaysenvisagedbythethreescenariosalsorequiresubstantialinvestmentinothertypesofassetsnotincludedintheseestimates,suchaselectricitydistributionandtransmissionnetworks,pipelinesfortransportinglow-carbonhydrogenandCO2,andnewfacilitiesforproducingbio-andhydrogen-basedfuels.Thecentralrolethatwindandsolarenergyplayintheproductionoflow-carbonelectricityrequiresasubstantialaccelerationintheinvestmentinnewcapacity.InAcceleratedandNetZero,theaveragelevelofannualinvestmentovertherestofthisdecadeisbetween20-80%higherthanrecentlevels.Thefallingcostofwindandsolarenergy(seepages56-57)meansthatinvestmentexpenditureinNewMomentumoutto2030islowerthanrecentlevelswhilstmaintainingasimilarpaceofincreaseinnewcapacitydeployed;investmentspendingscalesupinthesecondhalfoftheoutlookasdeploymentaccelerates.InAcceleratedandNetZero,around70%oftheinvestmentinnewwindandsolarcapacityovertheoutlookoccursinemergingeconomies.Thisunderlinestheimportancethatrenewabledevelopersintheseeconomieshavegoodaccesstocapitalandfinance.Althoughthedemandforoilandgasfallsinallthreescenarios,naturalbasedeclineinexistingproductionmeansthatcontinuinginvestmentinupstreamoilandnaturalgasassetsisrequiredinallthreescenariostomeetfuturedemand.Thisincludesinvestmentacrossarangeofdifferenttypesofsupply(brownfield,greenfield,andtightoilandnaturalgas).Theuncertaintysurroundingtheprospectsforfutureoilandnaturalgasdemandmeansshorter-cycleandphasedproductionopportunitieswithgreateroptionalitybecomeincreasinglyimportantovertime.Theimpliedratesofinvestmentinupstreamoilandgasinthesecondhalfoftheoutlook,especiallyinAcceleratedandNetZero,arelowerthanlevelsintherecentpastandsignificantlylessthantherequiredinvestmentinwindandsolarcapacity.Theaverageannualinvestmentinupstreamoilandnaturalgasovertherestofthisdecadeinthethreescenariosisbetween$325-$405billion,comparedwith$395billionintherecentpast.83bpEnergyOutlook:2023editionKeypointsInvestmentinwindandsolarcapacityincreasessharplyandcontinuesinoilandnaturalgasInvestmentandcriticalminerals$2020billion$2020billionAverageannualinvestmentinwindandsolarAverageannualinvestmentinupstreamoilandgasUpstreamoilandgasinvestmentincludescapitalexpendituresonwellsconstruction,facilitiesandexploration.Itdoesnotincludeoperationalexpenditures.202001000020000300004000050000600007000020200100020003000400050006000700020200200040006000800010000204020402040NewMomentumAcceleratedNetZeroNewMomentumNetZeroNewMomentumNetZeroElectriﬁcationoftransportBasedemandLowcarbonpowerAcceleratedAccelerated84ktkt,LithiumcarbonateequivalentktTheshifttoalow-carbonenergysystemrequiresasubstantialincreaseintheuseofarangeofmineralscriticalfortheinfrastructureandequipmentsupportingthistransition.Theincreasingdemandsformineralsandmaterialsassociatedwiththeenergytransitioncomefromacrossthelow-carbonenergysystem,includingtheconstructionofwindandsolarfacilities,batteries,hydrogenandCO2pipelines,andnewstoragefacilities.Twoparticularlyimportantsourcesofdemandinthisyear’sOutlookstemfrom:Growthinlow-carbonpowerrequiringasubstantialexpansioninthegridanddistributionsystemsusedtoconnectrenewableassetsanddeliverelectricitytoitsenduse.Electrificationofroadtransportleadingtoaglobalcarparcofbetween1-2billionelectricvehiclesby2050,implyinganincreaseddemandforannualbatterycapacitywithinroadtransportofbetween10-20TWh.Thegrowingrequirementsassociatedwiththeenergytransition,alongwiththebroadereconomicexpansionenvisagedovertheoutlook,haveimportantimplicationsforarangeofmineralscriticalforthetransition.Belowwelookatjustthree:copper,lithium,andnickel.Copper:Thefuturegrowthofcopperisdominatedbyitsuseintheconstructionofnewelectricitynetworksforlow-carbonpower,whichincreasesbetweenfour-andseven-foldoutto2040inthethreescenarios.Totalcopperdemandgrowsbetweentwoandthreetimesoverthisperiod:65-85%ofthegrowthisduetotheincreasingdemandforcoppertosupportthetransmissionoflow-carbonpowerandtheelectrificationoftransport.Asaresult,theuseofcopperwithinlow-carbonenergyactivitiesandelectrificationoftransportaccountsforaroundahalfoftotalcopperdemandin2040inAcceleratedandNetZerocomparedwitharound15%in2020.Lithium:Thegrowingdemandforlithiumovertheoutlookisdrivenbyitsuseinelectricvehicles,whichgrowsbyafactorofbetween25and60outto2040acrossthethreescenarios.Thisuseaccountsfor85-95%oftheaggregatedemandforlithiumin2040,comparedwith30%in2020.Nickel:Increasingdemandfornickelisalsodrivenbyitsroleintheelectrificationoftransport.Totalnickeldemandincreasesbetween2.5-4timesoutto2040acrossthethreescenarios–65-80%ofthatgrowthisduetotheincreasinguseoflithium-ionbatteriesinelectricvehicles.Thescenariosassumethatthesupplyofcriticalmineralsscalestomeettheseincreasingdemands.Thisrequiresasignificantincreaseininvestmentandresourceswithinthecriticalmineralsminingsector,aswellasanaccelerationinplanningandpermittingleadtimes.Thechallengeassociatedwiththisscalingupiscompoundedbytheneedtomaintainclosescrutinyonthesustainabilityofnewandexistingminingactivity.85bpEnergyOutlook:2023editionKeypointsCopperdemandLithiumdemandNickeldemandTheenergytransitionleadstoasignificantincreaseinthedemandforcriticalmineralsInvestmentandcriticalminerals86DatatablesModellingtheimpactoftheRussia-UkrainewarontheglobalenergysystemTheeconomicimpactofclimatechangeInvestmentmethodologyCarbonemissionsdefinitionsandsourcesOtherdatadefinitionsandsourcesDisclaimer87bpEnergyOutlook:2023editionAnnex8889bpEnergyOutlook:2023editionAnnexDatatablesLevelin2050Change2019-2050(p.a.)Shareofprimaryenergyin20502019AccNetZeroNMSAccNetZeroNMSAccNetZeroNMSPrimaryenergybyfuelTotal6276666307330.2%0.0%0.5%100%100%100%Oil1937839140-2.9%-5.0%-1.0%12%6%19%Naturalgas1408760166-1.5%-2.7%0.5%13%9%23%Coal158231796-6.0%-7.0%-1.6%4%3%13%Nuclear254047281.5%2.1%0.4%6%7%4%Hydro386165481.6%1.8%0.8%9%10%7%Renewables(incl.bioenergy)743774032565.4%5.6%4.1%57%64%35%NativeunitsOil(Mb/d)98422173Naturalgas(Bcm)3900242216584616PrimaryenergybyregionDeveloped234171162199-1.0%-1.2%-0.5%26%26%27%US97767489-0.8%-0.9%-0.3%11%12%12%EU65454251-1.2%-1.4%-0.8%7%7%7%Emerging3934954685340.8%0.6%1.0%74%74%73%China1471491381600.0%-0.2%0.3%22%22%22%India428888942.5%2.4%2.6%13%14%13%MiddleEast374745480.7%0.6%0.8%7%7%7%Russia30302632-0.1%-0.4%0.1%4%4%4%Brazil161715180.2%-0.1%0.5%2%2%3%Levelin2050Change2019-2050(p.a.)Shareoftotalfinalconsumptionin20502019AccNetZeroNMSAccNetZeroNMSAccNetZeroNMSTotalfinalconsumptionbysectorTotal477398335513-0.6%-1.1%0.2%100%100%100%Transport11910090114-0.6%-0.9%-0.1%25%27%22%Industry188153128203-0.7%-1.3%0.2%38%38%40%Feedstocks38362745-0.2%-1.0%0.6%9%8%9%Buildings13211090151-0.6%-1.2%0.4%28%27%29%GenerationbycarrierElectricity('000TWh)275761502.4%2.7%2.0%52%66%35%Hydrogen(Mt)663014601655.0%6.4%3.0%9%17%4%ProductionOil(Mb/d)98422173-2.7%-4.8%-0.9%Naturalgas(Bcm)3976242216584616-1.6%-2.8%0.5%Coal(EJ)168271592-5.7%-7.4%-1.9%EmissionsNetemissionsfromenergyandindustry(GtofCO2e)39.89.12.028.7-4.7%-9.1%-1.1%Carboncaptureuse&storage(Gt)0.04.16.11.156%58%49%MacroGDP(trillionUS$PPP)1282662662662.4%2.4%2.4%Energyintensity(MJofTFCperUS$ofGDP)3.71.51.31.9-2.9%-3.5%-2.1%Exajoules(EJ)unlessotherwisestated9091bpEnergyOutlook:2023editionAnnexModellingtheimpactoftheRussia-UkrainewarontheglobalenergysystemTheimpactoftheRussia-Ukrainewarwasmodelledbycapturingthreetypesofeconomicshockassociatedwiththewar:near-termcommodityprice(stagflation)shock,heightenedenergysecurityconcerns,andareducedpaceofglobalization.CommoditypriceshockThisshockismodelledasasharpbuttransitoryincreaseinfossilfuelprices,combinedwithsignificantlylowerglobalGDP.Realinterestratesarealsohigherascentralbankstightenmonetarypolicytocontrolinflation,whichincreasethelevelizedcostsofdifferentenergysources,affectingtherelativepricesofalternativetechnologies.Theshockdissipatesby2030,bywhichtimepricesand,inalmostallcases,GDPlevelshavereturnedtotheirlong-termtrend.TheexceptiontothisisthelevelofGDPinRussiaandUkraine,wherethewarisassumedtohaveapersistentnegativeimpactonGDP.HeightenedenergysecurityconcernsTheRussia-Ukrainewarisassumedtocausegovernmentstoimplementpoliciestoreducetheirdependencyonimportedenergy.Theshockismodelledbyaddingac.30%‘security’premiumtothepriceoftheenergyimportedintoeachregionorcountry.Thispremiumisincreasedtoroughly60%forenergyimportedbytheEUgivenitsparticularexposuretowar-relateddisruptionandtheneedtoreduceimportsfromRussiarapidly.Thesecuritypremiumimposedonimportedenergyincreasesthecompetitivenessofdomesticallyproducedenergy,includingrenewables,nuclearandhydropower.ReducedpaceofglobalizationThewarinUkraineisassumedtoreducethepaceofglobalization,ascountriesandregionsheightentheirfocusondomesticresilienceandreducetheirexposuretointernationalshocks.Thelowerprofileforinternationaltradeandopennesshasasmallbutnegativeimpactonglobaleconomicgrowth.Althoughtheeffectissmallonayearlybasis–reducingaverageannualgrowthbyaround0.1percentagepoint–theimpactonthelevelofGDPcompoundsovertime,reducingthelevelofglobalGDPbyaround4%in2050.Theimpactfromthisreducedpaceofglobalizationisassumedtohavedifferenteffectsindifferentcountriesandregions:withthoseeconomieswhosefutureeconomicgrowthisparticularlydependentoninternationaltradeandonthesharingofideasandproductivitythemostheavilyimpacted.Forexample,theshockhasamuchlargerimpactonemergingAsianeconomiesthanontheUnitedStates.Themethodologyusedtocalibratethedeglobalizationshockisbasedonthetradegrowthliterature,includingstudiesbytheWorldBank(2017)andAlcalaandCiccone(2004).Althoughthesethreeshocksareassumedtotakeeffectimmediately,theirpeakeffectsoccuroverdifferenttimeframes.Intheshortterm(upuntilaround2025),thecommoditypriceshockisthemostimpactful.Inthemediumterm(around2030-2035),theimpactfromheightenedenergysecurityconcernshasthelargestimpactontheenergysystem.Inthelongerterm,thelowerlevelofglobalactivitycausedbyreducedpaceofglobalizationispreeminent.Sources:WorldBank(2017)‘TheGlobalCostsofProtectionism’.PolicyResearchworkingpaper,no.WP8277.Alcala,F.andCiccone,A.(2004)‘TradeandProductivity’.TheQuarterlyJournalofEconomics,119(2),pp.613-646.9293bpEnergyOutlook:2023editionAnnexTheeconomicimpactofclimatechangeTheGDPprofilesusedintheEnergyOutlookcomefromOxfordEconomics(OE).Theselong-termforecastsincorporateestimatesoftheeconomicimpactofclimatechange.TheseestimatesdrawonthelatestresearchinthescientificliteratureandfollowasimilarmethodologytothatusedinEnergyOutlook2020andEnergyOutlook2022.OEupdatedandextendedtheestimationapproachdevelopedbyBurke,HsiangandMiguel(2015),whichsuggestsanon-linearrelationshipbetweenproductivityandtemperature,inwhichpercapitaincomegrowthrisestoanaverage(populationweighted)temperatureofjustunder15°C((Burkeetal.’sinitialassessmentwas13°C).Thistemperaturecurvesuggeststhat‘coldcountry’incomegrowthincreaseswithannualtemperatures.However,atannualtemperaturesabove15°C,percapitaincomegrowthisincreasinglyadverselyaffectedbyhighertemperatures.TheOEemissionsforecastsarebroadlyinlinewiththeIEASTEPSscenarioandassumeaverageglobaltemperatureswillreach2°Cabovepre-industriallevelsby2050.Theresultssuggestthatin2050globalGDPisaround2%lowerthaninacounterfactualscenariowherethetemperaturechangeremainedatthecurrentlevel.TheregionalimpactsaredistributedaccordingtotheevolutionoftheirtemperaturesrelativetotheconcavefunctionestimatedbyOE.WhileOE’sapproachcaptureschannelsassociatedwithaveragetemperatures,theseestimatesremainuncertainandincomplete;theydonot,forexample,explicitlyincludeimpactfrommigrationorextensivecoastalflooding.Themitigationcostsofactionstodecarbonizetheenergysystemarealsouncertain,withsignificantvariationsacrossdifferentexternalestimates.Mostestimates,however,suggestthattheupfrontcostsincreasewiththestringencyofthemitigationeffort,suggestingthattheyarelikelytobebiggerinAcceleratedandNetZerothaninNewMomentum.EstimatespublishedbytheIPCC(AR5–Chapter6)suggestthatforscenariosconsistentwithkeepingglobaltemperatureincreasestowellbelow2°C,medianestimatesofmitigationcostsrangebetween2-6%ofglobalconsumptionby2050.Giventhehugerangeofuncertaintysurroundingestimatesoftheeconomicimpactofbothclimatechangesandmitigation,andthefactthatallthreeofthemainscenariosincludebothtypesofcoststoagreaterorlesserextent,theGDPprofilesusedintheOutlookarebasedontheillustrativeassumptionthattheseeffectsreduceGDPin2050byaround2%inallthreescenarios,relativetothecounterfactualinwhichtemperaturesareheldconstantatrecentaveragelevels.Sources:Burke,M.,Hsiang,S.&Miguel,E.Globalnon-lineareffectoftemperatureoneconomicproduction.Nature527,235–239(2015)https://www.nature.com/articles/nature15725TheglobalaggregatemitigationcostestimatesintermsofGDPlossesaretakenfromIPCCAR5–Chapter6:https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_chapter6.pdf9495bpEnergyOutlook:2023editionAnnexInvestmentmethodologyOilandgasupstreamImpliedlevelsofoilandgasinvestmentarederivedfromtheproductionlevelsineachscenario.Upstreamoilandnaturalgascapitalexpenditureincludeswellcapex(costsrelatedtowellconstruction,wellcompletion,wellsimulation,steelcostsandmaterials),facilitycapex(coststodevelop,install,maintain,andmodifysurfaceinstallationsandinfrastructure)andexplorationcapex(costsincurredtofindandprovehydrocarbons).ItexcludesoperatingcostsandmidstreamcapexsuchascapexassociatedwithdevelopingLNGliquefactioncapacity.Assetlevelproductionprofilesareaggregatedbygeography,supplysegment(onshore,offshore,shaleandoilsands),supplytype(crude,condensates,NGLs,naturalgas)anddevelopmentalstage,i.e.,classifiedbywhethertheassetiscurrentlyproducing,underdevelopment,ornon-producingandunsanctioned.Asproductionfromproducingandsanctionedassetsdeclines,incrementalproductionfrominfilldrillingandnew,unsanctionedassetsiscalledontomeettheoilandgasdemandshortfalls.Theinvestmentrequiredtobringthisvolumeonlineisthenaddedtoanycapitalcostsassociatedwithmaintainingproducingandsanctionedprojects.Theaverage2022-2050declinerateforassetscurrentlyproducingandunderdevelopmentisaround4.5%p.a.forbothoilandfornaturalgas,althoughthisvarieswidelybysegmentandhydrocarbontype.Allestimatesarederivedusingasset-levelassessmentsfromRystadEnergy.WindandsolarWindandsolarenergyinvestmentrequirementsarebasedonthecapitalexpenditurecostsassociatedwiththedeploymentprofilesofeachtechnologyineachscenario.Windandsolardeploymentprofilesincludebothrenewablepowercapacityforend-useandforgreenhydrogenproduction.Thedeploymentprofilesalsoconsiderthepotentialimpactofcurtailment.Capitalexpenditurecostsareassignedtoeachscenariobasedontheirhistoricalvaluesandestimatedfutureevolution.Theyaredifferentiatedbytechnology,regionandscenariousingacombinationofinternalbpestimatesandexternalbenchmarking.Thecapitalexpenditurefiguresdonotincludetheincrementalwidersystemintegrationcostsassociatedwithwindandsolardeployment.9697bpEnergyOutlook:2023editionAnnexCarbonemissionsdefinitionsandsourcesUnlessotherwisestated,carbonemissionsrefertoCO2emissionsfrom:energyuse(i.e.theproductionanduseofenergyinthethreefinalend-usesectors:industry,transportandbuildings),mostnon-energyrelatedindustrialprocesses,naturalgasflaring,methaneemissionsassociatedwiththeproduction,transmissionanddistributionoffossilfuels,expressedinCO2equivalentterms.CO2emissionsfromindustrialprocessesreferonlytonon-energyemissionsfromcementproduction.CO2emissionsassociatedwiththeproductionofhydrogenfeedstockforammoniaandmethanolareincludedunderhydrogensectoremissions.HistoricaldatafornaturalgasflaringdataistakenfromVIIRSNightfire(VNF)dataandproducedbytheEarthObservationGroup(EOG),PayneInstituteforPublicPolicy,ColoradoSchoolofMines.Theprofilesfornaturalgasflaringinthescenariosassumethatflaringmovesinlinewithwellheadupstreamoutput.Historicaldataonmethaneemissionsassociatedwiththeproduction,transportationanddistributionoffossilfuelsaresourcedfromIEAestimatesofgreenhousegasemissions.TheprofilesforfuturemethaneemissionsassumedinthescenariosarebasedonfossilfuelproductionandtakeaccountofrecentpolicyinitiativessuchastheGlobalMethanePledge.Thenetchangeinmethaneemissionsistheaggregationoffuturechangestofossilfuelproductionandmethaneintensity.Thereisawiderangeofuncertaintywithrespecttobothcurrentestimatesofmethaneemissionsandtheglobalwarmingpotentialofmethaneemissions.ThemethanetoCO2efactorusedinthescenariosisa100-yearGlobalWarmingPotential(GWP)of25,recommendedbytheIPCCinAR4.Thisconversionfactorisusedtoensurealignmentwithfinancialandgovernmentreportingstandards,andtoensureconsistencyacrossallbpcorporatereporting.Inparticular,thisisthesamefactortobeusedinthebpAnnualReport,alsopublishedinQ12023.IPCCscenariosandemissionsmethodologyWeusescenariosthatareinthedatabasecorrespondingtotheSixthAssessmentReportpublishedin2022.ThisdatabaseishostedbytheInternationalInstituteforAppliedSystemsAnalysis(IIASA)aspartofacooperationagreementwithWorkingGroupIIIoftheIPCC.Thescenariosusedintheanalysisarethoselabelledas:ScenariosC1:thesescenariosarereferredtoasscenariosthatlimitwarmingto1.5°C(>50%)withnoorlimitedovershoot.ScenariosC3a:thesescenariosarereferredtoasscenariosthatlimitwarmingto2°C(>67%)withimmediateaction.CumulativeCO2eemissionsin2015-2050aretheadditionofCO2emissionsfromenergyandindustrialprocessesandmethaneemissionsfromenergysupplytransformedintoCO2eusingafactorGlobalWarmingPotentialof25.TheAR6ScenariosDatabasereportdataforeveryfiveyears.Forthemissingintermediateyears,alinearinterpolationisused.SourcesAndrew,R.M.,2019.GlobalCO2emissionsfromcementproduction,1928–2018.EarthSystemScienceData11,1675–1710,(updateddatasetJuly2021)IPCC2006,2006IPCCGuidelinesforNationalGreenhouseGasInventories,PreparedbytheNationalGreenhouseGasInventoriesProgramme,EgglestonH.S.,BuendiaL.,MiwaK.,NgaraT.andTanabeK.(eds).VIIRSNightfire(VNF)producedbytheEarthObservationGroup(EOG),PayneInstituteforPublicPolicy,ColoradoSchoolofMines.IEA(2021),GreenhouseGasEmissionsfromEnergyDataExplorer,IEA,ParisIPCCFourthAssessmentReport:ClimateChange2007.IPCCSixthAssessmentReport–ClimateChange2022:Impacts,AdaptationandVulnerabilityIEA(2021),MethaneTracker2021,IEA,ParisSustainabilityReportingGuidancefortheOilandGasIndustry,4thEdition,2020.IPIECA/API/IOGP.EdwardByers,VolkerKrey,ElmarKriegler,KeywanRiahi,RobertoSchaeffer,JarmoKikstra,RobinLamboll,ZebedeeNicholls,MaritSanstad,ChrisSmith,Kaj-IvarvanderWijst,AlaaAlKhourdajie,FranckLecocq,JoanaPortugal-Pereira,YaminaSaheb,AndersStrømann,HaraldWinkler,CorneliaAuer,ElinaBrutschin,MatthewGidden,PhilipHackstock,MathijsHarmsen,DanielHuppmann,PeterKolp,ClaireLepault,JaredLewis,GiacomoMarangoni,EduardoMüller-Casseres,RagnhildSkeie,MichaelaWerning,KatherineCalvin,PiersForster,CelineGuivarch,TomokoHasegawa,MalteMeinshausen,GlenPeters,JoeriRogelj,BjornSamset,JuliaSteinberger,MassimoTavoni,DetlefvanVuuren.AR6ScenariosDatabasehostedbyIIASAInternationalInstituteforAppliedSystemsAnalysis,2022.9899bpEnergyOutlook:2023editionAnnexOtherdatadefinitionsandsourcesDatadefinitionsarebasedonthebpStatisticalReviewofWorldEnergy,unlessotherwisenoted.Datausedforcomparisons,unlessotherwisenoted,arerebasedtobeconsistentwiththebpStatisticalReview.Primaryenergy,unlessotherwisenoted,comprisescommerciallytradedfuelsandtraditionalbiomass.InthisOutlook,primaryenergyisderivedusing:thesubstitutionmethod-whichgrossesupenergyderivedfromnon-fossilpowerbytheequivalentamountoffossilfuelrequiredtogeneratethesamevolumeofelectricityinathermalpowerstation.Thegrossingassumptionistimevarying,withthesimplifiedassumptionthatefficiencywillincreaselinearlyfrom40%todayto45%by2050GrossDomesticProduct(GDP)isexpressedintermsofrealPurchasingPowerParity(PPP)at2015prices.SectorsTransportincludesenergyusedinheavyroad,lightroad,marine,railandaviation.Electricvehiclesincludeallfourwheeledvehiclescapableofplug-inelectriccharging.Industryincludesenergyusedincommodityandgoodsmanufacturing,construction,mining,theenergyindustryincludingpipelinetransport,andfortransformationprocessesoutsideofpower,heatandhydrogengeneration.Feedstocksincludesnon-combustedfuelthatisusedasafeedstocktocreatematerialssuchaspetrochemicals,lubricantandbitumen.Buildingsincludesenergyusedinresidentialandcommercialbuildings,agriculture,forestry,andfishing.RegionsDevelopedisapproximatedasNorthAmericaplusEuropeplusDevelopedAsia.EmergingreferstoallothercountriesandregionsnotinDeveloped.ChinareferstotheChineseMainland.DevelopedAsiaincludesOECDAsiaplusotherhighincomeAsiancountriesandregions.EmergingAsiaincludesallcountriesandregionsinAsiaexcludingmainlandChina,IndiaandDevelopedAsia.Fuels,energycarriers,carbonandmaterialsOil,unlessotherwisenoted,includescrude(includingshaleoilandoilsands),naturalgasliquids(NGLs),gas-to-liquids(GTLs),coal-to-liquids(CTLs),condensates,andrefinerygains.Hydrogen-derivedfuelsareallfuelsderivedfromlow-carbonhydrogen,includingammonia,methanol,andothersynthetichydrocarbons.Renewables,unlessotherwisenoted,includeswind,solar,geothermal,biomass,biomethane,andbiofuelsandexcludelarge-scalehydro.Non-fossilsincluderenewables,nuclearandhydro.Traditionalbiomassreferstosolidbiomass(typicallynottraded)usedwithbasictechnologiese.g.forcooking.Hydrogendemandincludesitsdirectconsumptionintransport,industry,buildings,powerandheat,aswellasfeedstockdemandfortheproductionofhydrogen-derivedfuelsandforconventionalrefiningandpetrochemicalfeedstockdemand.Low-carbonhydrogenincludesgreenhydrogen,andhydrogenproducedfrombiomasswithCCUS,gaswithCCUS,andcoalwithCCUS.CCUSoptionsincludeCO2captureratesof93-98%overtheOutlook.Theglobalaveragemethaneemissionsrateforthegasorcoalconsumedtoproducebluehydrogenisbetween1.4-0.7%overtheOutlook.KeydatasourcesBPp.l.c.,bpStatisticalReviewofWorldEnergy,London,UnitedKingdom,June2021InternationalEnergyAgency,WorldEnergyStatistics,September2021InternationalEnergyAgency,WorldEnergyBalances,July2021OxfordEconomics,GlobalGDPForecasts,2022UnitedNations,DepartmentofEconomicandSocialAffairs,PopulationDivision(2019).WorldPopulationProspects2019,OnlineEdition.Rev.1IEA(2021),MethaneTracker2021,IEA,ParisSustainabilityReportingGuidancefortheOilandGasIndustry,4thEdition,2020.IPIECA/API/IOGP.100101bpEnergyOutlook:2023editionAnnexDisclaimerThispublicationcontainsforward-lookingstatements–thatis,statementsrelatedtofuture,notpasteventsandcircumstances.Thesestatementsmaygenerally,butnotalways,beidentifiedbytheuseofwordssuchas‘will’,‘expects,‘isexpectedto’,‘aims’,‘should’,‘may’,‘objective’,‘islikelyto’,‘intends’,‘believes’,anticipates,‘plans’,‘wesee’orsimilarexpressions.Inparticular,thefollowing,amongotherstatements,areallforwardlookinginnature:statementsregardingtheglobalenergytransition,increasingprosperityandlivingstandardsinthedevelopingworldandemergingeconomies,expansionofthecirculareconomy,urbanizationandincreasingindustrializationandproductivity,energydemand,consumptionandaccess,impactsoftheCoronaviruspandemic,theglobalfuelmixincludingitscompositionandhowthatmaychangeovertimeandindifferentpathwaysorscenarios,theglobalenergysystemincludingdifferentpathwaysandscenariosandhowitmayberestructured,societalpreferences,globaleconomicgrowthincludingtheimpactofclimatechangeonthis,populationgrowth,demandforpassengerandcommercialtransportation,energymarkets,energyefficiency,policymeasuresandsupportforrenewableenergiesandotherlower-carbonalternatives,sourcesofenergysupplyandproduction,technologicaldevelopments,tradedisputes,sanctionsandothermattersthatmayimpactenergysecurity,andthegrowthofcarbonemissions.Forward-lookingstatementsinvolverisksanduncertaintiesbecausetheyrelatetoevents,anddependoncircumstances,thatwillormayoccurinthefuture.Actualoutcomesmaydiffermateriallyfromthoseexpressedinsuchstatementsdependingonavarietyoffactors,including:thespecificfactorsidentifiedinthediscussionsexpressedinsuchstatements;productsupply,demandandpricing;politicalstability;generaleconomicconditions;demographicchanges;legalandregulatorydevelopments;availabilityofnewtechnologies;naturaldisastersandadverseweatherconditions;warsandactsofterrorismorsabotage;publichealthsituationsincludingtheimpactsofanepidemicorpandemicandotherfactorsdiscussedinthispublication.bpdisclaimsanyobligationtoupdatethispublicationortocorrectanyinaccuracieswhichmaybecomeapparent.NeitherBPp.l.c.noranyofitssubsidiaries(noranyoftheirrespectiveofficers,employeesandagents)acceptliabilityforanyinaccuraciesoromissionsorforanydirect,indirect,special,consequentialorotherlossesordamagesofwhatsoeverkindinorinconnectionwiththispublicationoranyinformationcontainedinit.©BPp.l.c.2023

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