Reduce speed limits and car-free Sundays: The IEA has a 10-point plan to cut oil use – CNBC

Speed limits on highways should be cut by at least 10 kilometers per hour (6.2 mph) to help lower oil demand, the International Energy Agency said Friday.

The recommendation is part of a wider 10-point plan published by the Paris-based organization.

“We estimate that the full implementation of these measures in advanced economies alone can cut oil demand by 2.7 million barrels a day within the next four months, relative to current levels,” the IEA’s report said.

The 2.7 million figure equated to the oil demand of all cars in China, it added in a news release. Part or full adoption of the measures in emerging economies would amplify their effect, it also said.

The plan comes at a time when oil markets are facing significant uncertainty and volatility following Russia’s invasion of Ukraine in February.

Russia is a major supplier of oil and gas, but its actions in Ukraine have caused several economies to try and find ways to reduce their reliance on Russian hydrocarbons.

In a news conference broadcast via Zoom on Friday morning, the IEA’s executive director, Fatih Birol, described oil markets as being in an “emergency situation.” Birol added that things “may get worse” over the next few months.

Against this backdrop, the IEA’s other suggestions to reduce oil demand include:

• Working from home for as much as three days per week, when possible.
• Car-free Sundays for cities.
• Reducing the cost of public transport and encouraging people to walk and cycle.
• Avoiding air travel for business when other options are available.
• Traveling on high speed or night trains instead of flying when it’s practicable to do so.
• And reinforcing the uptake of electric and “more efficient” vehicles. The full list can be read here.

“Reducing oil use must not remain a temporary measure,” the IEA’s report said. “Sustained reductions are desirable in order not only to improve energy security but also to tackle climate change and reduce air pollution.”

It added that governments had “all the necessary tools at their disposal to put oil demand into decline in the coming years, which would support efforts to both strengthen energy security and achieve vital climate goals.”

A number of organizations are calling for a cut in fossil fuel use, but actually achieving such an aim is a gargantuan task. The vast majority of cars on our roads, for instance, still use gasoline or diesel, while energy companies continue to discover new oil and gas fields in a variety of locations around the world.

In a statement issued Friday, the IEA acknowledged that the majority of its proposals “would require changes in the behaviour of consumers, supported by government measures.”

“How and if these actions are implemented is subject to each country’s own circumstances – in terms of their energy markets, transport infrastructure, social and political dynamics and other aspects,” the IEA said.

Also commenting on the IEA’s plans was Barbara Pompili, the French minister for the ecological transition.

“France and all European countries must get out of their dependence on fossil fuels, in particular on Russian fossil fuels as soon as possible,” she said.

“It is an absolute necessity, for the climate but also for our energy sovereignty. The plan proposed today by the IEA offers some interesting ideas, some of which are in line with our own ideas to reduce our dependence on oil.”

The IEA’s report follows on from the publication of another 10-point plan centered around reducing Europe’s dependence on Russian natural gas.