A recent report conducted by the International Energy Agency (IEA) states that as China’s economy becomes more consumer-oriented, the rate of growth in oil demand is expected to slow down through 2023.
The head of the oil industry and markets division at the IEA, Niel Atkinson said factors that need to be considered include better efficiency, the fast development of electric vehicles and the restructuring of the energy mix, the growth rate of oil demand in China will gradually slow down during the next six years.
Atkinson was speaking at the China Launch of the IEA Market Report Series: Oil 2018 that was held in Beijing.
China has become the world’s biggest electric vehicle market with the help of subsidies in only a few years. IEA has released figures that show China saw 336,00 new electric car registrations in 2016.
“Other clean energy substitutes, including liquefied natural gas, have also replaced consumption of petroleum and diesel in the country,” Atkinson said.
The IEA report showed that there are signs of substitution of oil by other energy sources in various countries with China being a prime example, which has some of the world’s most stringent fuel efficiency and emissions regulations.
“As the country recognises the urgent need to tackle poor air quality in cities, efforts are intensifying, with sales of electric vehicles rising and a strong growth in the deployment of natural gas vehicles, particularly into fleets of trucks and buses. A rising number of electric buses and LNG-fuelled trucks in China will significantly slow gas and oil demand growth,” the report said.
The report also revealed that in the upcoming six years, petrochemicals will be a key driver of oil demand growth. The fastest-growing source of global oil demand growth is petrochemicals, particularly in the United States and China.
Another research organisation called Bloomberg New Energy Finance said in their latest report that China is expected to invest $3 trillion in power generation over the next 25 years, with some 75% of the investment expected to be into the renewable energy sector.