Increased demand from transport, which currently accounts for one-fifth of global final energy consumption, is expected to make up all future growth in oil use worldwide, the IEA predicted in a two reports published on Wednesday (19 September).
The reports did, however, identify a “massive potential” to reduce demand for transport fuel even if the number of cars were to double by 2050.
One of the reports looks at the available transport technologies (Technology Roadmap: Fuel Economy of Road Vehicles), while the other (Policy Pathway: Improving the Fuel Economy of Road Vehicles) examines the changes needed in policies which would stimulate technology.
The IEA presents fuel efficiency as one of the main tools for curbing the world's dependency on oil, which has become increasingly costly in recent years.
This has added pressure on a wide range of other industries which depend on oil, such as agriculture and construction, pushing up prices for food and many other consumer products.
However, with the right policies in place to promote new technologies and improve fuel efficiency, the world could save as much as four-fifths of its current global oil consumption, according to the IEA.
Over 50% of worldwide oil consumption is used for transport, with three-quarters of it consumed on the roads, the reports say.
“Tackling road transport energy use is vital to enhancing energy security and reducing carbon dioxide emissions globally,” IEA Deputy Executive Director Richard Jones said.
“Conventional combustion engine vehicles are set to be around for a long time and without the right policy mixes, like the ones described in these publications, the demand for energy from road vehicles will be unsustainable,” Jones said.
To reduce their dependency on oil and capture the savings potential, governments must act "quickly" to boost the use of available technologies.
Compared with 2005 levels, the potential for improving the fuel economy of all vehicle types within the 2030 time frame ranges from 30% to 50%, the technical IEA report says. “This represents a very important opportunity for saving oil and cutting carbon dioxide (CO2 ) over the coming two decades and beyond.”
Although many fuel-saving technologies are already commercially available and cost-effective, their deployment is often hampered by policy barriers.
“Strong policies are needed to ensure that the full potential of these technologies is achieved over the next 10 to 20 years,” the technical report says.
Some other technologies need additional research to become commercially viable, including waste-heat recovery devices and lightweight materials, according to the IEA.
New policies must promote fuel economy technologies and improve tested and in-use fuel economy, the agency said. Policies should encourage the transformation of the new vehicle market by addressing market failures, the high upfront costs needed for innovative technologies and information gaps.
For this, the IEA proposed three main policy elements:
- Information measures such as fuel economy and/or carbon dioxide emissions labelling;
- Vehicle fuel economy and CO2 emission standards;
- Fiscal measures such as vehicle taxes and tax incentives and fuel taxes.
Taxes provide significant incremental incentives to save fuel and are a vital part of any policy package to promote sustainable transport, according to the IEA. The IEA gave Denmark as an example, where the vehicle purchase tax is very high even though the most efficient vehicles, such as electric cars, receive a subsidy.
But while some countries have had fuel economy policies for years, much stronger ones have only recently been adopted in major OECD markets such as the United States, the European Union and China. Other parts of the world, including most major emerging economies, still lack fuel economy standards or fiscal measures or even fuel economy labelling programmes.