South Korea is the second-largest buyer of Abu Dhabi's oil, and experts say environmental targets will reduce demand for the Gulf's most important export.
South Korea to introduce greenhouse gas targets
South Korea, the second-largest buyer of Abu Dhabi's oil, pledged this week to impose new limits on greenhouse gas emissions that will reduce its consumption of fossil fuels. The country is the latest in Asia to propose emissions limits as a December summit of world leaders on climate change approaches. Emissions targets in developed countries will change the make-up of buyers in the oil market, experts say, and have the potential to reduce overall consumption of the Gulf's most important export. "In the longer term, both Korea and Japan and indeed China will be working very hard to slow down the growth of their oil imports," said John Mitchell, an energy security expert at Chatham House, the British think tank. In Japan, the largest buyer of Abu Dhabi crude, "demand is pretty flat and will probably fall" in the longer-term, he said. "Where Japan goes, Korea will probably follow." On Tuesday, Korea's government announced three possible scenarios for curbing emissions, the most ambitious of which would see carbon output reduced to 8 per cent below 2005 levels, by 2020. The government will choose a firm target later this year, it said. Emissions growth would be slowed with new incentives to promote the switch to hybrid and electric cars, nuclear energy and renewables such as wind and solar power. Oil currently makes up 43.6 per cent of Korea's energy mix, a proportion the government wants to reduce to 36.2 per cent by 2020, and 33 per cent in 2030. Renewables, meanwhile, will grow to 11.9 per cent by 2030, from 2.5 per cent today. Because energy use will grow throughout the period, those figures show the country's actual consumption of oil will first increase 2.3 per cent to 104.2 million tonnes by 2020, and then shrink to 99.1 million tonnes by 2030. The projections echo Opec's findings in its long-term energy outlook released last month. Oil consumption in Japan and Korea has already peaked, Opec said, and will gradually fall by 15 per cent by 2030. Oil use in China and South East Asia, however, would grow by 98 per cent and 55 per cent, respectively, Opec said. "Eighty per cent of net growth in oil demand from 2008. firstname.lastname@example.org