China would soon be surpassed by India as the country driving global oil demand

15 Jun 2023 , 09:55 AM

According to the head of the International Energy Agency (IEA), Fatih Birol, India will soon surpass China as the country with the highest impact on the world’s oil demand. At the same time, India has the potential to take the lead in the production of green hydrogen. 

The third-largest energy consumer in the world is being driven by an expanding population that has probably already surpassed China’s. Its transition to cleaner energy is predicted to lag behind that of other regions, but the country can become a global leader in green hydrogen by producing affordable power from renewable energy sources like solar energy.

‘India’s need for oil will increase. I believe that India will soon surpass China as the main force behind the increase in global oil consumption,’ Birol told PTI on the sidelines of a G20 meeting in Delhi.

This is primarily due to China’s quicker adoption of electric vehicles, which has caused a decline in the use of gasoline and diesel.

Rapid electrification of automobiles and buses is ‘one of the factors for the weakening of oil demand in China,’ he said.

He hoped that as electrification (the use of automobiles powered by batteries charged by electricity) increases, demand will decline in India.

When compared to India, which sold 48,000 EVs within the same time period, sales of electric vehicles in China nearly doubled to 6.1 million units.

In an earlier speech at the ceremony, Birol said that six years prior, he had predicted that India would take the lead in world energy affairs. ‘After six years, I can tell you that India is currently at the forefront of world energy affairs.’

This is due to the country’s enormous demand as well as the quick progress made in replacing fossil fuels with biofuels like ethanol manufactured from sugarcane, cereal grains, and agricultural waste and generating power from renewable sources like solar.

He said that by adding 10% ethanol to gasoline, the nation was able to save oil imports worth USD 2 billion.

‘In the last five years, India was the largest contributor to the global solar capacity,’ he added, noting that the country has offered access to power to 500 million people and cooking gas to roughly 100 million in order to reduce household pollution brought on by the use of wood and other fuels for cooking.

The cleanest energy source known to man, hydrogen, can be used in a similar manner.

He claimed that India could split water to create green hydrogen using the inexpensive electricity it generates from renewable resources.

It might become the least environmentally friendly hydrogen producer.

India, in his opinion, cannot afford to miss the historic chance to be the forerunner and a superpower in green hydrogen. 

He declared that it was excellent news for both India and the rest of the globe when Minister Puri suggested that India might achieve net zero before 2070. ‘In my opinion, rich countries should achieve their net zero targets well in advance of (the current deadline of) 2050 and leave enough room for emerging countries to achieve their net zero later on so the world as a whole reach net zero by 2050,’

Speaking on the state of the world’s energy, he stated that last year, of all the power plants constructed worldwide, 80% were based on renewable energy sources, and the remaining 20% on fossil fuels.

Solar energy makes up the majority of renewable energy, he said. ‘For the first time, more money is being invested globally in solar energy than in the extraction of crude oil. Solar, in my opinion, currently rules the world’s energy system.

Additionally, he noted, the number of electric cars sold worldwide increased exponentially from one out of every 25 vehicles sold two years ago to one out of every five vehicles sold this year.

‘Based on the available data and committed investment, a new clean energy economy is forming. Not that we won’t continue to use oil and gas. We will continue to use oil and gas, he said.

He added that of the USD 2.7 trillion invested in energy this year, USD 1 trillion will go toward fossil fuels and USD 1.7 trillion will go toward clean energy sources. Since 2015, the amount invested in sustainable energy has grown steadily.

But China and advanced economies are where investments in sustainable energy are growing. The necessity for developed economies, multilateral organizations, and financial institutions to assist clean energy investment in developing countries is stressed by the fact that only a small share is occurring in emerging markets, where it is most needed.

For feedback and suggestions, write to us at [e-mail]