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International Energy Agency warns over global appetite for SUVs

International Energy Agency warns over global appetite for SUVs

The growing global consumer appetite for bigger and heavier sports utility vehicles (SUVs) could offset the emission benefits set to arise from electric cars, the International Energy Agency (IEA) warns in its latest World Energy Outlook.
The global fleet of SUVs increased from 35 million in 2010 to over 200 million in 2018, becoming a major force in rising oil demand and the second-largest reason for carbon dioxide (CO2) emissions growth since 2010.

Energy-related CO2 emissions hit another historic high in 2018, with the 1.9 percent rise marking the highest yearly increase since 2013. The power sector was the main driver, with global coal use rising in 2018 for the second straight year, but remaining some 160-million tons of coal equivalents below the level of the 2014 peak.
SUVs, the World Energy Outlook 2019 notes, are more difficult to electrify fully, while conventional SUVs consume 25 percent more fuel per kilometre than medium-sized cars.

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The share of SUVs in global car sales has more than doubled over the last ten years to reach 40 percent, the report states. The trend is also not confined to the US, where almost 50 percent of new car sales are SUVs, with strong growth in Europe, China and India.
Under the report’s stated policies scenario, which reflects today’s policy intentions and targets, the increase in electric vehicle (EV) sales and more stringent fuel economy standards together lead to a peak in oil demand from passenger cars in the late-2020s. By 2040, it is projected that the 330-million EVs on the road in this scenario could displace around four-million barrels a day of oil use.

The projection is sensitive to what happens with SUVs, however. “On the one hand, if their popularity continues to rise in line with recent trends, then this could add another two-million barrels per day to 2040 oil demand. If, on the other, the share of SUVs in new sales levels off at around 50 percent and if in addition a higher share of the SUV fleet is electrified by 2040, the effect would be in the opposite direction.”
Under the report’s sustainable development scenario, which is calibrated to global climate commitments and meeting sustainable energy goals, electrification of mobility proceeds more quickly and the EV fleet may get to almost 900-million by 2040.
The report warns, however, that electrification alone is not sufficient to secure the steep decline in transport oil demand required to meet climate targets. To achieve the goal will require additional improvements in fuel efficiency, as well as the use of other alternative transport fuels, such as advanced biofuels and hydrogen.

The World Energy Outlook 2019 report also cautions that, while the global power mix is being re-shaped by the rise of renewables, significantly more ambitious policy action will be required to align the energy sector to the goal of holding the rise in global temperatures to well below 2 °C and pursuing efforts to limit it to 1.5 °C.
“The world urgently needs to put a laser-like focus on bringing down global emissions. This calls for a grand coalition encompassing governments, investors, companies and everyone else who is committed to tackling climate change. “Our sustainable development scenario is tailor-made to help guide the members of such a coalition in their efforts to address the massive climate challenge that faces us all” IEA executive director Fatih Birol says.