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USE OF BIOFUELS FORECAST TO TRIPLE BY 2014 Nov. 19, 2015 Ethanol Producer magazine reports: The International Energy Agency released its latest World Energy Outlook 2015, saying there are clear signs that an energy transition is under way. The report finds that the plunge in oil prices has set in motion the forces that lead the market to rebalance, and cautions that strong direction is needed from the upcoming United Nations conference on climate change in Paris, COP2. "It would be a grave mistake to index our attention to energy security to changes in the oil price," said IEA Executive Director Fatih Birol. "Now is not the time to relax. Quite the opposite: a period of low oil prices is the moment to reinforce our capacity to deal with future energy security threats." The World Energy Outlook 2015 examines all energy sectors, looking at global energy trends to 2014, the oil market, natural gas, unconventional gas, coal, power, renewables and energy efficiency, along with a section discussing energy in India today. Each sector is analyzed under three scenarios, with current and new policies, as well as a more aggressive 450 Scenario that would result in greater greenhouse gas (GHG) reductions. It also examines the impact of low oil prices. In the New Policies Scenario, renewables meet around 35 percent of the total growth in primary energy demand, the report says. "By 2040, renewable energy accounts for one-third of total electricity generation, one-sixth of heat demand and more than 5 percent of all transport fuel consumption." The New Policies Scenario assumes that government support for biofuels through blending mandates generally persists. "Biofuel blending mandates are now in place in around 60 countries and, in the New Policies Scenario, demand for biofuels in transport is projected to triple over the Outlook period, exceeding 4 million barrels of oil equivalent per day (mboe/d) by 2040." That would be up from 1.5 mboe/d today and would be 70 percent ethanol, with the remainder biodiesel. The report projects investments in biofuels supply will average $15 billion per year over the period, and remain concentrated in the U.S., Brazil and EU, with some expansion in China and India. That will have plunged from the 2007 high of $27 billion, although higher than the $4.6 billion average per year from 2010-'13. The 450 Scenario projects the impact of "much stronger policy interventions to address climate change [that] leads to a peak in oil demand by 2020," the report says. Projections for world biofuels demand under the 450 Scenario call for 2.1 mb/d in 2020 and rising to 9.4 mb/d in 2040. Under that scenario, by 2040 world oil demand drops to 74.1 mb/d. In 2013, the global biofuels share of total transport fuels is 3 percent. Under the different scenarios, current policies are projected to lead to biofuels rising to a 4 percent in 2025 and 5 percent in 2040. Under its New Policies Scenario the 2025 projections at 4 percent is the same, but the 2040 projection rises to 6 percent. Under the more aggressive 450 Scenario, the 2025 projection if 7 percent and the 2040 projection is 18 percent. The 718-page report delves deeply into the projections for each scenario in each energy sector. The beginning chapters, however, analyze the findings in light of the upcoming Paris climate change conference. "The WEO-2015 scenarios demonstrate the huge impact that government policies can have on energy-related emissions," the report says. "The Current Policies Scenario sees the growth in energy-related carbon-dioxide (CO2) emissions average 1.2 percent per year over the Outlook period, maintaining a broadly consistent pace through to 2040. Total OECD emissions in 2040 are 7 percent lower than 2013 levels, while non-OECD emissions are more than 65 percent higher. The growth in emissions is much slower in the New Policies Scenario, but total emissions still fail to peak by 2040. In both scenarios, therefore, the world moves further away from achieving its agreed 2 degree Celsius climate goal, but at differing speeds. "In the 450 Scenario, the long-standing trend of increasing energy-related CO2 emissions is quickly halted and emissions then decline by more than 2 percent per year (on average), to stand at around 19 gigatonnes (Gt) in 2040. Key policy and technology drivers that underpin this change in direction include stronger support for renewables deployment in the power sector, CCS (in power and industry), carbon pricing, more rapid reform of fossil-fuel subsidies, and broader adoption and stronger application of energy efficiency policies and low-carbon forms of transport." The executive summary and fact sheets are available at the World Energy Outlook 2015 website. The full report can be purchased there as well. Tweet |
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