1. Global Energy Markets and Environment Challenges: Today and Tomorrow
Fatih Birol, Executive Director, International Energy Agency
Milan, 6 July 2017

2. Shares in growth in world energy demand
A rapidly shifting energy landscape
Shares in growth in world energy demand
Since 2010, efficiency measures have slowed down growth in global energy consumption .
Renewables and natural gas account for almost two-thirds of the growth.

3. Largest production increases in the oil history
US shale the most successful story in the oil history outside Saudi Arabia
Largest production increases in the oil history
mb/d 6 5 4
Iran
USSR
Russia
North Sea
Iraq 3 2 1
Saudi Arabia
US LTO
Differently from all other regions, US shale oil growth results from technological and market progress rather than the discovery and deployment of huge oil resources

4. Global electric car fleet
Electric mobility is breaking records, but policy support remains critical
Global electric car fleet
The global electric car fleet passed 2 million last year, but sales growth slipped from 70% in 2015
to 40% in 2016, suggesting the boom may not last without sustained policy support

5. Trucks drive global oil demand95
Petrochemical
Other
Transport 90
Trucks
Cars
Other transport
Oil demand (mb/d) 85 80 75
I already mentioned that trucks are an important source of global oil demand. But let me explain how important they really are.
[CLICK] Oil demand has grown at a rapid pace over the past one and a half decades.
[CLICK] Since 2000, global oil demand has grown by nearly 16 mb/d to more than 90 mb/d today.
[CLICK] The transport sector is at the heart of global oil demand growth: more than 80% of global growth was carried by cars, trucks, planes and ships. Much of the remainder comes from the petrochemical feedstocks to produce plastics.
When thinking about transport, it is pretty intuitive to think of cars as being the main driver of transport-related oil demand: since 2000, the global stock of cars more than doubled to nearly 1 billion vehicles today. In comparison, the stock of trucks is much smaller: when looking at heavy freight trucks of more than 3.5 tonnes, there are only close to 60 million such vehicles on the road. But trucks consume much more fuel than cars: the largest long haul trucks can use as much as 40 liters of diesel per 100 km, while a car uses only between 5-10 l/100 km. And trucks drive much further than cars: the largest long haul trucks are operated all year round and in some countries drive easily more than km per year, compared to only around km for a car.
[CLICK] The result is that despite the much smaller stock of trucks, their weight on oil demand is huge: road freight transport was the largest single contributor to global oil demand growth over the past one and a half decades, at around 40% of total growth, outpacing even passenger cars. What’s more, trucks are the largest source of diesel demand growth: around 80% of global growth in diesel demand came from trucks. The main global sources of oil demand from trucks today are the United States, the European Union and China.
China was the main driver of truck oil demand growth over the past one and a half decades, at around one quarter of the global total. India and other countries in Southeast Asia were also important contributors, and so was Latin America, in particular Brazil. 70
2000
Increase by sector
2015
Trucks were responsible for nearly 40% of the growth in global oil demand since 2000; they are the fastest growing source of oil demand, in particular for diesel.

6. CO2 emissions growth in the Reference Scenario, 2015-2050
A modern truck sector is still a long haul away
CO2 emissions growth in the Reference Scenario,
Power sector
Industry sector
Coal use
Trucks
100
200
300
400
500
600
700
800
900 Mt
Without further policy efforts, trucks will account for 40% of the oil demand growth to 2050 and 15% of the increase in global CO2 emissions

7. Share of LNG in global gas trade
A 2nd natural gas revolution is changing the gas security equation
Share of LNG in global gas trade
2000
525 bcm
2015
695 bcm
2040
1 150 bcm
LNG 53%
Pipeline
Pipeline
LNG 40%
Pipeline
LNG 26%
A wave of new LNG supply, led by Australia and the US will improve the ability of the system to react to potential demand or supply shocks, but security of gas supply cannot be taken for granted

8. Global energy-related CO2 emissions
Global CO2 emissions flat for 3 years – an emerging trend?
Global energy-related CO2 emissions Gt 35 30 25 20 15 10 5
1970
1975
1980
1985
1990
1995
2000
2005
2010
2014
2015
2016
IEA analysis shows that global CO2 emissions remained flat in 2016 for the third year in a row, even though the global economy grew, led by emission declines in the US & China

9. Premature deaths due to air pollution
Air pollution is a universal problem, especially in emerging economies
Premature deaths due to air pollution
Deaths per people
High (>100)
Medium (50-100)
Low (0-50)
Source: World Health Organization
6.5 million premature deaths every year are caused by pollution from power plants, factories, cars and trucks
globally. Air pollution related health risks are largest in cities around the world.

10. Efficiency and renewables key to global climate change mitigation
Global CO2 emissions reductions in the Central & 2 °C Scenario by technology Gt 18 22 26 30 34 38
2010
2020
2030
2040
Central Scenario
Efficiency
Renewables
2 °C Scenario
Fuel switching
Nuclear
CCS
Other
Supply-side investment needs to be re-directed, not increased; demand-side investment for energy efficiency, electrification & renewables needs to ramp up significantly.

11. Wind & solar transforming the power sector: system integration is key
Share of wind and solar in total electricity generation in selected CEM countries
% of wind and solar
in 2016
Better grids, more flexible power plants and storage & demand side response will be needed to integrate larger shares of wind & solar in a secure and cost-effective way

12. The potential of clean energy technology remains under-utilised
Solar PV and onshore wind
Energy storage
Electric vehicles
Nuclear
Transport – Fuel economy of light-duty vehicles
Energy-intensive industrial processes
Lighting, appliances and building equipment
More efficient coal-fired power
Carbon capture and storage
Building construction
Transport biofuels
●Not on track
●Accelerated improvement needed
●On track
Recent progress in some clean energy areas is promising, but many technologies still need a strong push to achieve their full potential and deliver a sustainable energy future

13. on clean energy and electricity networks Top 3 IT company R&D spenders
Global clean energy R&D funding needs a strong boost
Global R&D spending
on clean energy and electricity networks
Top 3 IT company R&D spenders
We've tracked a steady $37 billion/year of clean energy and electricity networks R&D spending, with room for growth from the private sector. As a share of GDP, China now spends most on energy R&D

14. Closing remarks
While a continued focus on oil security is essential, a broader approach to energy security is needed to reflect changing nature of natural gas & electricity markets
US shale oil triggers a deep transformation of oil industry dynamics
A wave of LNG is the catalyst for a second natural gas revolution, with far- reaching implications for gas pricing & contracts
The next chapter in the rise of renewables requires more work on systems integration & expanding their use beyond the power sector
Limiting the global temperature rise to 2°C would require an energy transition of exceptional scope, depth & speed, including stronger R&D efforts