In the IEO2021 Reference case, energy consumption continues to rise through 2050 in both OECD and non-OECD countries, largely as a result of increasing GDP and population. As standards of living increase, most notably in non-OECD Asian countries, demand for goods and the energy needed to manufacture those goods increase.
In the industrial sector, energy consumption grows, but the energy intensity in that sector (energy consumed per dollar of gross output from the industrial sector) decreases. Energy consumed for passenger travel in OECD countries remains below 2019 levels through 2050, but non-OECD energy consumption for passenger travel exceeds that of OECD countries by 2025. In buildings, electricity use in non-OECD countries more than doubles by 2050 compared with 2020 levels.
Regionally, differences in GDP growth, economic structure, and standards of living directly influence how, where, and what energy is used. In the IEO2021 Reference case, the combined GDP of non-OECD economies grows quickly to twice that of the combined GDP of OECD countries by 2050. Although standards of living (as indicated by household income per capita) in non-OECD countries are rising the fastest, non-OECD economies average less than half of their OECD counterparts by 2050. Within the non-OECD countries, household income per capita is rising fastest in Asian economies.
Energy intensity in the industrial sector—defined here as energy use per unit of gross output—generally decreases after 2020 in the IEO2021 Reference case because of changes to the composition of regional economies and increases in energy efficiency. Indexed to 2020, average energy intensities diverge between OECD and non-OECD countries through 2050, as developing economies expand their industrial sectors and invest in technologically advanced, more-efficient capital.
In the IEO2021 Reference case, industrial sector energy use in non-OECD countries is more than double that of OECD countries by 2050. Throughout the projection period, the use of energy in the industrial sectors of non-OECD countries increases among all fuel types. With such a large amount of energy consumption in the sector, fuel choices in the non-OECD countries heavily influence the global energy systems and therefore emissions.
Aggregate global passenger travel demand (including light-duty vehicle [LDV], bus, two- and three-wheeler, rail, and air travel) continues historical growth trends through 2050 in the IEO2021 Reference case. After returning to 2019 levels in 2023, global travel nearly doubles from 44 trillion passenger-miles to 80 trillion passenger-miles by the end of the projection period. The increase in travel is largely a result of an increase in non-OECD LDV travel.
In the IEO2021 Reference case, travel demand depends on factors such as income, oil price, and employment. Average travel demand per capita in OECD countries continues to be more than double that of non-OECD countries. The difference in travel demand per capita growth between the OECD and non-OECD countries is tied to the difference in annual average population growth, which grows three times faster in non-OECD countries than in OECD countries between 2020 and 2050.
Total non-OECD passenger travel demand continues to outpace OECD travel through 2050; although, we project energy consumption for non-OECD passenger travel will not surpass that of the OECD until 2026. Historical non-OECD travel demand is met with energy-efficient travel modes on a per-passenger-mile basis (for example, two- or three-wheelers and buses), while a significant share of future travel demand will likely be met with a less efficient mix (for example, air and LDVs). We project air and LDV travel to grow faster than bus, two- and three-wheeler, or rail travel. The increasing non-OECD passenger travel energy consumption is a key driver in the continued growth in liquid fuels demand in the IEO2021 Reference case. In addition, this non-OECD shift in passenger transportation modes, coupled with OECD countries experiencing slower population growth and strict LDV fuel economy standards, results in diverging projections for non-OECD and OECD passenger travel energy use.
The amount of energy buildings use rises proportionally with the growth of non-OECD energy consumption, maintaining a 13% share of energy use in the Reference case. However, buildings gain a 10% share of all electricity consumed across non-OECD countries over the next 30 years, and in 2050, buildings account for more than half of non-OECD electricity use. Electricity accounts for half of non-OECD energy use in buildings by 2040 and more than doubles by 2050 compared with 2020 levels.
Non-OECD countries’ electricity use in buildings exceeds electricity use across OECD countries’ building stock for the first time in 2026. Generally, the OECD building stock exhibits less opportunities for expanding electrification because household income and population growth are less robust than in the non-OECD countries, resulting in less investment in newer capital stock and equipment.
We project electricity use in buildings to grow fastest in India, where the average rate of expanding electricity use (electrification) is 10 times faster than population growth. By 2050, household electricity use in India increases to more than five times 2020 levels, largely a result of increasing population and rising household income. Electricity use in commercial buildings almost quadruples as the service sector of India’s economy expands.
Industrial sector energy use in non-OECD countries is more than double that of OECD countries by 2050.