Before the COVID-19 pandemic, energy consumption in the transportation sector of non-OECD countries had almost grown to the level of OECD countries. Energy consumption in both regions declined as a result of pandemic responses in 2020. A variety of factors, including varied responses to the pandemic, different modal mixes, and the minimal impact of the pandemic on the consumption of energy in China for transportation contribute to a faster return to the 2019 consumption level in non-OECD regions. In addition, increasing populations and travel demand offset declines during the COVID-19 pandemic and drive a faster return to pre-pandemic energy consumption levels in non-OECD countries. As a result, in the Reference case, non-OECD energy consumption in the transportation sector surpassed that of OECD countries for the first time in 2020. Although we project transportation energy consumption to return to 2019 levels by 2022 for non-OECD countries, we do not expect it to return to those levels for OECD countries partly because of increasingly strict fuel economy standards.
Global air travel—which accounted for 16% of global transportation energy consumption in 2019—significantly declined in 2020. The IEO2021 Reference case estimates that global jet fuel consumed for passenger air travel declined nearly 50% in 2020, compared with 2019 levels. Passenger travel dropped from an estimated 90% of global commercial jet fuel consumption in 2019 to 75% in 2020.
We project aggregate travel demand to return to 2019 levels in 2026 for OECD countries and 2025 for non-OECD countries, while we project passenger jet fuel consumption to return to 2019 levels in 2028 and 2026, respectively.
The projected growth in jet fuel consumption relies on three components: travel per capita, population, and efficiency. We expect travel per capita and population to grow faster than efficiency in non-OECD countries, resulting in a return to 2019 jet fuel consumption levels in 2026. In contrast, efficiency increases in OECD countries offset slower travel and population growth until 2028. Fleet efficiency returns to 2019 levels by 2023 for both OECD and non-OECD countries.
Overall consumption of energy in buildings declined in 2020 from 2019 levels across all OECD and non-OECD countries. On average, delivered energy consumption in buildings returns to pre-pandemic levels faster in non-OECD countries, by 2021. For OECD countries, we project pandemic impacts will extend through 2024 across the commercial buildings stock. OECD households don’t resume 2019 levels of energy consumption until after 2030.
The economic output of the service sector is a key driver of consumption of energy in commercial buildings. Declines in commercial energy use in 2020 were steeper in OECD countries, on average, because pandemic mitigation measures hit the service sector harder. Non-OECD countries—China, in particular— experienced relatively minor impacts to the service sector, supporting a quicker return to 2019 levels of energy use in non-OECD buildings.
As a result of having a greater share of jobs that could be done from home, OECD countries generally consumed more household electricity in 2020 than in 2019; the opposite was true for non-OECD countries on average. Gains in energy efficiency and a stable population limit the pace of overall home energy use returning to 2019 levels in OECD countries, which the Reference case projects will occur after 2030.
Before 2030, heavy manufacturing—also called energy-intensive manufacturing—shifts away from OECD regions to non-OECD regions, especially India and Other non-OECD Asia where this sector is growing the fastest. Generally, heavy manufacturing produces goods that require the most energy to make and are often lower value, commoditized products, such as raw plastic, chemicals, or crude steel. Lighter manufacturing—also called non-energy-intensive manufacturing—produces higher-value products (often closer to finished products) for the consumer, such as computers, transportation equipment, plastic cups, or medicines. The industrial sector’s main driver of energy consumption is industry-specific gross output; growth in heavy manufacturing will increase energy demand by more than growth in lighter manufacturing.
As a share of overall industrial energy consumption from 2020 to 2030, non-energy-intensive manufacturing is relatively flat at 21% in OECD countries, but it increases from 34% to 37% in non-OECD countries. Two main factors drive these trends. First, the demand for finished goods in non-OECD countries increases as populations grow and standards of living rise. This demand for goods creates markets for manufacturing supply chains located near the customer. So, the IEO2021 Reference case projects a return to the previous trend of relocating supply chains, which support a quick return to pre-pandemic levels in the global industrial sector. Second, energy efficiency gains in heavy industry contribute to the decrease in energy-intensive manufacturing’s share of energy consumption over time.
Although we project transportation energy consumption to return to 2019 levels by 2022 for non-OECD countries, we do not expect it to return to those levels for OECD countries.