The Net-Zero Budget Crunch: Emissions Set to Breach 2∘C Limit by 2040s

The global community is on a trajectory to exhaust the critical 2∘C carbon budget limit by the early 2040s, according to alarming new modeling from BP. The energy major’s annual outlook confirms this risk by raising its long-term oil and gas demand forecasts, signaling a fundamental failure in the pace of the clean energy transition required to hit the 2050 net-zero target.
BP’s revised figures indicate a sustained appetite for hydrocarbons. Oil consumption in 2050 is now projected to hit 83 million barrels per day (b/d), an 8% increase from the previous 77 million b/d estimate. Natural gas demand is similarly forecast to remain elevated at 4,806 billion cubic meters annually in 2050. Furthermore, BP has delayed the expected date of peak oil demand by five years, now projecting 103 million b/d in 2030.
The primary reason for this slow transition is the overriding focus on national energy security, amplified by geopolitical factors. BP’s chief economist attributes the trend to the war in Ukraine, Middle East conflicts, and rising trade tariffs. This drive for self-sufficiency risks encouraging reliance on domestically produced fossil fuels, even as it creates an incentive for some countries to accelerate towards low-carbon ‘electrostates.’
The report emphasizes the stark difference between the current path and the necessary one. To meet the 2050 net-zero goal, oil demand must drop aggressively to about 35 million b/d by that date. The risk of breaching the carbon budget early, the company warns, will significantly increase the future economic and social costs associated with necessary climate mitigation.
Despite the rapid expansion of renewables—projected to meet over 80% of new electricity demand by 2035—oil is forecast to remain the largest single source of primary global energy supply, holding a 30% share in 2035. Renewables are set to rise from 10% to 15% of the primary energy supply by 2035 but are not expected to surpass oil’s market share until the late 2040s, highlighting the slow structural change in the global energy mix.