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India to Overtake China as Global Oil Demand Driver; Potential to Become Green Hydrogen Superpower

Mr. Fatih Birol, International Energy Agency (IEA) Chief, attended a G20 event in Delhi and commented on India’s existing and growing prowess as a global energy leader. He commented that India will overtake China as a driver of global oil demand and has the potential to become a green hydrogen superpower.

Jun 14, 2023

green hydrogen

Mr. Fatih Birol, International Energy Agency (IEA) Chief, stated that India will soon overtake China as the largest driver of global oil demand. He also said that India can emerge as the lowest green hydrogen producer by using the cheap electricity it produces from renewable sources to split water to produce green hydrogen, “India in my view cannot afford to miss the historical opportunity to be leader, to be a superpower in green hydrogen.”

He commented while attending a G20 event in Delhi, “India’s oil demand will grow. I think India will soon take over from China as the largest driver of global oil demand growth. One of the factors for the weakening of oil demand in China is the rapid electrification of cars and buses.” In 2022, China’s EV sales nearly doubled to 6.1 MU compared to 48,000 vehicles in India. He hoped that demand in India will go down as electrification picks up.

A swelling population is driving demand in the world’s third-largest energy-consuming nation. Its transition from fossil fuels to cleaner sources is expected to lag other regions, but cheap electricity produced from renewable energy sources like solar energy can help transform the nation into a green hydrogen leader.

Earlier, Birol had said that India is set to move to the center stage of global energy affairs, in an extension he stated, “After 6 years today, I can tell you that India is at the center of global energy affairs today.”

Apart from huge demand the rapid strides India has made in generating electricity from renewable sources like solar and using biofuels like ethanol produced from sugarcane, foodgrains, and agri waste to replace fossil fuels, are also responsible for putting India onto the center stage. India avoided USD 2 billion worth of oil imports by mixing 10 percent ethanol in petrol. “In the last 5 years, India was the largest contributor to the global solar capacity. It has provided 500 million people access to electricity and given cooking gas to nearly 100 million to eliminate household pollution caused by using wood and other for cooking.”

He further commented on Shri Hardeep Puri, Union Oil Minister, “When Minister Puri said India may reach net zero before 2070, it is very good news for India and the rest of the world. In my view, rich countries should reach their net zero targets well before (the current deadline of) 2050 and therefore, leave enough room for emerging countries to reach their net zero later on so the world as a whole reach net zero by 2050.”

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Speaking on the global energy scenario, he shared that 80 percent of power plants built were renewable energy-based, with solar power being the main chunk, “For the first time, the amount of global investment going into solar is higher than the amount of investment going into oil production. In my view, solar is the queen of the global energy system now”.

Out of the total USD 2.7 trillion investment in energy this year, USD 1 trillion is for fossil fuels and USD 1.7 trillion in clean energy sources, he expressed, “Looking at the data and investment already locked in, a new clean energy economy is emerging. It doesn’t mean we will stop using oil and gas. We will use oil and gas for years to come.”

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