Fossil fuel demand to fall over the coming decades

Changes in environmental policies, increasing energy efficient technology and more affordable renewable energy will cause fossil fuel demand to drop significantly by 2040. That is according to an analysis by Carbon Tracker which challenges the major energy firms predictions that the fossil fuel industry will continue to rise.

The analysis finds that the fossil fuel industry has seriously underestimated new climate change legislation. President Barak Obama has made it Americas priority to reduce their carbon emissions and China are now also making an effort to reduce their emissions. Americas and China are the worlds biggest fossil fuel consumers and investment in energy efficient technology and renewable energy will reduce the demand of fossil fuels.

Carbon Tracker point to the Volkswagen scandal as proof that the fossil fuel industry are willing to mislead consumers and believe that the industry’s predictions are an attempt to increase investment in fossil fuels.

This analysis will come as welcome news to environmental campaigners, with it putting doubt into investors minds. Investors could now look at putting their money into renewable energy instead of fossil fuels.

With this predicted drop in demand for fossil fuel, it could also mean cheaper energy prices for businesses in the UK. Business energy prices have been falling since the turn of the year, with the price of oil crashing.