Oil consumption and CO2 emissions in China's road transport: current status, future trends, and policy implications

With the rapid economic growth in China, the Chinese road transport system is becoming one of the largest and most rapidly growing oil consumers in China. This paper attempts to present the current status and forecast the future trends of oil demand and CO2 emissions from the Chinese road transport sector and to explore possible policy measures to contain the explosive growth of Chinese transport oil consumption. A bottom-up model was developed to estimate the historical oil consumption and CO2 emissions from China's road transport sector between 1997 and 2002 and to forecast future trends in oil consumption and CO2 emissions up to 2030. To explore the importance of policy options of containing the dramatic growth in Chinese transport oil demand, three scenarios regarding motor vehicle fuel economy improvements were designed in predicting future oil use and CO2 emissions. We conclude that China's road transportation will gradually become the largest oil consumer in China in the next two decades but that improvements in vehicle fuel economy have potentially large oil-saving benefits. In particular, if no control measures are implemented, the annual oil demand by China's road vehicles will reach 363 million tons by 2030. On the other hand, under the low- and high-fuel economy improvement scenarios, 55 and 85 million tons of oil will be saved in 2030, respectively. The scenario analysis suggests that China needs to implement vehicle fuel economy improvement measures immediately in order to contain the dramatic growth in transport oil consumption. The imminent implementation is required because (1) China is now in a period of very rapid growth in motor vehicle sales; (2) Chinese vehicles currently in the market are relatively inefficient; and (3) the turnover of a fleet of inefficient motor vehicles will take a long time.