Managing Competing Sectoral Demands for Energy Resources

Decarbonising the transport sector will increase demand for new energy resources, such as renewable electricity, low-carbon hydrogen, biogenic resources, and capturing CO₂. To meet climate goals and the associated demand for these resources, renewable energy supply needs to be scaled up at an unprecedented speed. Potential supply bottlenecks risk placing the transport sector in direct competition with other sectors of the economy, such as buildings and industry, or even between different modes within the transport sector.

To help manage scarcity and guide markets to better prioritise and allocate limited energy resources, governments should develop regulations following a cross-sectoral ”merit order”. The report supports governments in their long-term energy system planning to decarbonise the transport sector in tandem with the rest of the economy. It also explores supply bottlenecks and approaches to facilitate international co-operation, where appropriate.