Released October 08, 2025 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--In its annual long-term global energy outlook released September 25, BP Plc (London, England) analyzed two possible scenarios for how the world's energy markets could evolve over the next 25 years: a business-as-usual case, called "Current Trajectory," and a net-zero carbon world, called "Below 2°," to reflect the Paris Agreement's goal of keeping long-term global temperature gain to under 2° Celsius since the Industrial Revolution.
In his final year of helming the BP Energy Outlook, Chief Economist Spencer Dale started with his customary caution: "This is not an attempt to predict the future. There is only a tiny chance that the world's energy system will develop according to our two scenarios. Our scenarios span a wide range of possible outcomes. They are set up to help to illustrate the key trends and uncertainties surrounding the possible development of energy markets out to 2050."
BP defined its "Current Trajectory" case to "capture the broad pathway along which the global energy system is travelling. It places weight on climate and energy policies now in place and on recent trends and shifts in those policies. It also puts weight on global aims and pledges for future decarbonization, while recognizing the challenges associated with meeting some of those aims and pledges. The other scenario, "Below 2°," assumes "a significant tightening in climate policies alongside shifts in societal behavior and preferences, which together support more rapid adoption of low carbon energy alongside faster gains in energy efficiency."
In the report and his remarks to the press, Dale and his designated successor, Gareth Ransay, currently BP's head of energy transition & system analytics, discussed how the cases could share common trends as well as how they might differ.
Both of BP's scenarios envision a decline in the energy-related emission of carbon dioxide (CO2) to 2050, but at sharply different paces. In the "Current Trajectory" case, emissions decline modestly to about 2035, then fall at a faster rate to 2050, ending with projected emissions of just over 30 gigatonnes of CO2-equivalent. In the "Below 2°" scenario, emissions fall sharply over the next 25 years, ending at about 5 gigatonnes in 2050.
Click on the image at right to see a chart of CO2-equivalent emissions from the energy sector to 2050 under the two scenarios.
Lower emissions in the "Below 2°" case would be driven by two factors: faster decarbonization in emerging economies, such as China, India and other emerging economies, and faster decarbonization, around the world, in the power and industry sectors, BP said.
Another commonality across the two cases is the dominant role that China and other emerging economies are expected to play in driving global primary energy demand higher over the next 25 years. Primary energy demand from China and other emerging economies is expected to account for approximately 70% of global energy demand through 2035 and 2050 under either the "Current Trajectory" and "Below 2°" cases. That's a higher percentage than the 60% of primary energy demand those nations accounted for in 2023, BP said.
Click on the image at right to see primary energy demand under two scenarios to 2035 and 2050.
Worldwide use of oil declines in both cases to 2050, though the rate of decline is faster in the "Below 2°" case. By 2050, BP said in its 107-page report, global oil demand would fall from its current level of about 100 million barrels per day (BBL/d) to about 35 million BBL/d in the "Below 2°" case or something more than 80 million BBL/d in the "Current Trajectory" case.
In his September 25 remarks, Chief Economist Dale highlighted how in either case a growing share of oil would be used as a feedstock to make petrochemicals, and that oil use in road transport would decline due to greater penetration of electric vehicles and a gradual increase in vehicle mileage efficiency.
Click on the image at right to see projections of worldwide oil demand to 2050 under two scenarios.
Petrochemical use of oil accounted for about 14 million BBL/d of global oil demand in 2023. In the "business-as-usual case," that would rise to 23 million BBL/d in 2050. In the net-zero case, that sector would account for about 15% of worldwide oil demand by 2050.
The world's demand for natural gas sharply diverges in the two scenarios over the next 25 years, depending on the speed of the energy transition, the BP report said. In the "Current Trajectory" case, demand continues to rise until about 2040 before leveling off for the following decade. In that case, gas use plateaus at about 4,800 billion cubic meters (Bcm) per year, up from current levels of about 4,000 Bcm. But in the "Below 2°" case, demand plummets to less than 2,000 Bcm by 2050.
"The outlook for natural gas is shaped by two opposing forces: increasing demand in emerging economies as they rapidly grow and industrialize, offset by a shift away from natural gas as the world increasingly electrifies and decarbonizes," BP said in its outlook report. "The relative strength of these two forces -- and hence the outlook for natural gas -- depends on the pace of the energy transition."
Click on the image at right to see a graphic of the divergent futures for natural gas demand under two scenarios to 2050.
Turning to coal, BP said its role in the global energy system has plateaued and will decline under either scenario to 2050. Falling coal use to generate electricity in China, and, to a lesser degree, in more fully developed economies, is the culprit for the declining fortunes of the Black Rock over the next 25 years.
Another common theme in both scenarios is the rising demand for electricity around the world. Electricity demand rises rapidly throughout the 25-year timeline in the report, driven by rising prosperity and growing populations in emerging economies, and by increasing electrification across all sectors. Demand growth is driven by growing electrification of transportation and data centers, BP said.
Click on the image at right to see how electric demand could grow to 2035 and 2050 under two scenarios.
In the U.S., BP observed, demand growth from data centers "plays a much more significant role than at a global level, accounting for around 40% of the total increase in electricity demand between 2023 and 2035" in its business-as-usual case. Most of the new demand for power in either case will be met by wind and solar, the report added.
In this year's outlook, BP called attention to three sensitivities that could significantly affect global energy markets to 2050: increased geopolitical fragmentation, continued weakness in energy efficiency and the possible consequences of a delayed and disorderly transition to a lower-carbon energy future.
"By varying key aspects of (both scenarios), it is possible to explore the impact of other issues and uncertainties affecting the outlook of the energy system," the report said, adding that there are far more than three sensitivities that could affect the trajectory of global energy markets over the next 25 years.
Regarding increased geopolitical fragmentation, BP noted that "there have been significant increases in geopolitical conflicts and tensions in recent years, including the wars in Ukraine and the Middle East, and the greater use of trade sanctions and tariffs. Further escalation in these tensions could lead to increased geopolitical fragmentation, in which countries reduce their exposure to international trade and become increasingly self-reliant, with significant implications for the global energy system."
In a more geopolitically fragmented world, energy security concerns rise and global trade of all forms declines, which could lead to lower economic growth rates, increased reliance on domestically produced energy, and less willingness to export domestically produced energy or energy technologies. Ultimately, climate goals suffer.
The second sensitivity explored in the Energy Outlook: 2025 Edition is the sustained weakness of energy efficiency gains. "This may sound dull and techy, but energy efficiency matters a lot" when creating energy scenarios, Dale said. Global energy efficiency gains averaged about 1.9% per year over the 2010-2019 period, but that has slipped to roughly 1.5% per year. That might not sound like a lot, but compounded over a 25-year timeframe it would have a "materially stronger outlook for energy demand" by 2035, with follow-on effects on production and prices, he added.
A third sensitivity is the possible consequences of a delayed and disorderly transition to a low-carbon future, which basically is an extension of where the world is right now, BP said. Continuing on this path past beyond the early 2030s would make it "increasingly hard to stay within a 2°C carbon budget without the subsequent need for costly -- or 'disorderly' -- measures. These measures, which could take many different forms, would need to rapidly reduce or curtail the use of unabated fossil fuels and highly emitting activities, in order to further accelerate the speed of decarbonization."
Of the three sensitivities, BP said, continued weakness in energy efficiency gains would have the greatest impact on the velocity and trajectory of the transition to a low-carbon energy future.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
In his final year of helming the BP Energy Outlook, Chief Economist Spencer Dale started with his customary caution: "This is not an attempt to predict the future. There is only a tiny chance that the world's energy system will develop according to our two scenarios. Our scenarios span a wide range of possible outcomes. They are set up to help to illustrate the key trends and uncertainties surrounding the possible development of energy markets out to 2050."
BP defined its "Current Trajectory" case to "capture the broad pathway along which the global energy system is travelling. It places weight on climate and energy policies now in place and on recent trends and shifts in those policies. It also puts weight on global aims and pledges for future decarbonization, while recognizing the challenges associated with meeting some of those aims and pledges. The other scenario, "Below 2°," assumes "a significant tightening in climate policies alongside shifts in societal behavior and preferences, which together support more rapid adoption of low carbon energy alongside faster gains in energy efficiency."
In the report and his remarks to the press, Dale and his designated successor, Gareth Ransay, currently BP's head of energy transition & system analytics, discussed how the cases could share common trends as well as how they might differ.
Both of BP's scenarios envision a decline in the energy-related emission of carbon dioxide (CO2) to 2050, but at sharply different paces. In the "Current Trajectory" case, emissions decline modestly to about 2035, then fall at a faster rate to 2050, ending with projected emissions of just over 30 gigatonnes of CO2-equivalent. In the "Below 2°" scenario, emissions fall sharply over the next 25 years, ending at about 5 gigatonnes in 2050.
Lower emissions in the "Below 2°" case would be driven by two factors: faster decarbonization in emerging economies, such as China, India and other emerging economies, and faster decarbonization, around the world, in the power and industry sectors, BP said.
Another commonality across the two cases is the dominant role that China and other emerging economies are expected to play in driving global primary energy demand higher over the next 25 years. Primary energy demand from China and other emerging economies is expected to account for approximately 70% of global energy demand through 2035 and 2050 under either the "Current Trajectory" and "Below 2°" cases. That's a higher percentage than the 60% of primary energy demand those nations accounted for in 2023, BP said.
Worldwide use of oil declines in both cases to 2050, though the rate of decline is faster in the "Below 2°" case. By 2050, BP said in its 107-page report, global oil demand would fall from its current level of about 100 million barrels per day (BBL/d) to about 35 million BBL/d in the "Below 2°" case or something more than 80 million BBL/d in the "Current Trajectory" case.
In his September 25 remarks, Chief Economist Dale highlighted how in either case a growing share of oil would be used as a feedstock to make petrochemicals, and that oil use in road transport would decline due to greater penetration of electric vehicles and a gradual increase in vehicle mileage efficiency.
Petrochemical use of oil accounted for about 14 million BBL/d of global oil demand in 2023. In the "business-as-usual case," that would rise to 23 million BBL/d in 2050. In the net-zero case, that sector would account for about 15% of worldwide oil demand by 2050.
The world's demand for natural gas sharply diverges in the two scenarios over the next 25 years, depending on the speed of the energy transition, the BP report said. In the "Current Trajectory" case, demand continues to rise until about 2040 before leveling off for the following decade. In that case, gas use plateaus at about 4,800 billion cubic meters (Bcm) per year, up from current levels of about 4,000 Bcm. But in the "Below 2°" case, demand plummets to less than 2,000 Bcm by 2050.
"The outlook for natural gas is shaped by two opposing forces: increasing demand in emerging economies as they rapidly grow and industrialize, offset by a shift away from natural gas as the world increasingly electrifies and decarbonizes," BP said in its outlook report. "The relative strength of these two forces -- and hence the outlook for natural gas -- depends on the pace of the energy transition."
Turning to coal, BP said its role in the global energy system has plateaued and will decline under either scenario to 2050. Falling coal use to generate electricity in China, and, to a lesser degree, in more fully developed economies, is the culprit for the declining fortunes of the Black Rock over the next 25 years.
Another common theme in both scenarios is the rising demand for electricity around the world. Electricity demand rises rapidly throughout the 25-year timeline in the report, driven by rising prosperity and growing populations in emerging economies, and by increasing electrification across all sectors. Demand growth is driven by growing electrification of transportation and data centers, BP said.
In the U.S., BP observed, demand growth from data centers "plays a much more significant role than at a global level, accounting for around 40% of the total increase in electricity demand between 2023 and 2035" in its business-as-usual case. Most of the new demand for power in either case will be met by wind and solar, the report added.
In this year's outlook, BP called attention to three sensitivities that could significantly affect global energy markets to 2050: increased geopolitical fragmentation, continued weakness in energy efficiency and the possible consequences of a delayed and disorderly transition to a lower-carbon energy future.
"By varying key aspects of (both scenarios), it is possible to explore the impact of other issues and uncertainties affecting the outlook of the energy system," the report said, adding that there are far more than three sensitivities that could affect the trajectory of global energy markets over the next 25 years.
Regarding increased geopolitical fragmentation, BP noted that "there have been significant increases in geopolitical conflicts and tensions in recent years, including the wars in Ukraine and the Middle East, and the greater use of trade sanctions and tariffs. Further escalation in these tensions could lead to increased geopolitical fragmentation, in which countries reduce their exposure to international trade and become increasingly self-reliant, with significant implications for the global energy system."
In a more geopolitically fragmented world, energy security concerns rise and global trade of all forms declines, which could lead to lower economic growth rates, increased reliance on domestically produced energy, and less willingness to export domestically produced energy or energy technologies. Ultimately, climate goals suffer.
The second sensitivity explored in the Energy Outlook: 2025 Edition is the sustained weakness of energy efficiency gains. "This may sound dull and techy, but energy efficiency matters a lot" when creating energy scenarios, Dale said. Global energy efficiency gains averaged about 1.9% per year over the 2010-2019 period, but that has slipped to roughly 1.5% per year. That might not sound like a lot, but compounded over a 25-year timeframe it would have a "materially stronger outlook for energy demand" by 2035, with follow-on effects on production and prices, he added.
A third sensitivity is the possible consequences of a delayed and disorderly transition to a low-carbon future, which basically is an extension of where the world is right now, BP said. Continuing on this path past beyond the early 2030s would make it "increasingly hard to stay within a 2°C carbon budget without the subsequent need for costly -- or 'disorderly' -- measures. These measures, which could take many different forms, would need to rapidly reduce or curtail the use of unabated fossil fuels and highly emitting activities, in order to further accelerate the speed of decarbonization."
Of the three sensitivities, BP said, continued weakness in energy efficiency gains would have the greatest impact on the velocity and trajectory of the transition to a low-carbon energy future.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
