The International Energy Agency (IEA) today released the 2025 edition of its flagship report, the World Energy Outlook (WEO), finding that demand for oil and coal remains on track to peak by 2030 in a business-as-usual (STEPS) scenario, driven by unstoppable growth in renewable energy and electricity – but this is well below what is needed for the 1.5°C maximum to survive.
It is important for the IEA to make clear that the current policy scenario, which is outdated, heavy on fossil fuels and reintroduced under US pressure, does not reflect “business as usual”. Instead, it implausibly assumes that current policy and technology trends are freezing or reversing, which depicts the administration’s imagination rather than the reality of today’s rapidly evolving energy market.
While the Trump administration and its fossil fuel allies continue to promote this outdated vision, the World Economic Outlook makes clear that the fastest, cheapest, and healthiest path forward is a rapid transition to renewable energy. The Net Zero Emissions (NZE) scenario would provide the lowest cost energy and fastest path to full energy access, compared to a future of high energy prices, high air pollution death rates, and unmitigated climate catastrophe under the CPS, which can be described as a “raw dream scenario.”
Importantly, both the CPS and business-as-usual scenario see little relief from the current energy affordability crisis plaguing households and businesses, while NZE sees costs stabilizing and declining by the mid-2030s.
In response, David Tong, Global Industry Campaign Director at Oil Change International, said:
“This year’s World Energy Outlook sets a stark, simple choice: Either we protect people and communities by holding warming at 1.5°C, resign ourselves to disaster at 2.5°C, or choose to slide into a nightmare future of much warmer temperatures. Keeping warming at 1.5°C means no more delays, no new fossil fuels, and public planning and financing to ensure a just energy transition. However, the United States is trying to put this The path – the only path to survival – is unattainable by reviving an outdated scenario based on fossil fuels that assumes governments abandon their efforts and progress stalls.
“But crucially, the IEA also stressed that no country alone can stop the energy transition, with demand for oil and coal peaking by 2030 in a business-as-usual scenario, and then gas soon after. Once again, the agency reiterated that there is no need to invest in new oil and gas fields to reduce the temperature by 1.5 degrees Celsius.
“But this year’s report also shows Donald Trump’s dystopian future, replaying the scenario of outdated, fossil-fuel-dependent, high-pollution current policies, and charting an unrealistic course in which governments pull back their energy policies and halt renewable energy adoption rates, leading to higher energy prices and unmitigated climate catastrophe. At COP30, governments must reject this nightmare fantasy, support a just transition, and choose a rapid, fair, and financed phase-out of fossil fuels.”
Notes to editors
- The World Economic Outlook shows that climate safety is less expensive than continued reliance on fossil fuels: The World Economic Outlook report outlines the benefits of governments fulfilling their statutory duty to maintain the 1.5°C limit by implementing the rapid, fair and financed transition away from fossil fuels agreed at COP28: The NZE scenario leads to the lowest household energy bills through increased efficiency and lower fuel costs, increases overall energy system resilience, provides full energy access by 2030, and saves 2 million lives by reducing air pollution – before taking into account the costs avoided from climate damage from keeping Temperatures rise at low levels. maybe. In New Zealand, countries currently reliant on fossil fuel imports will see these bills fall by more than two-thirds by 2035.
- Peak fossil fuels approaching: A peak in fossil fuels is still expected under the base path of STEPS, which expects renewable capacity to nearly triple by 2035, even after taking into account US policy rollbacks. The International Energy Agency expects coal to decline before 2030, oil to peak in 2030, and gas to peak around 2035. The increase in gas supplies, led by the United States, is pushing the expectations for basic gas demand higher, by reducing prices in the near term. This is not inevitable, and other governments and subnational leaders in the United States can and should accelerate renewable energy deployment instead to avoid fluctuations caused by fossil fuels. Contrary to industry claims, the IEA sees marginal potential for gas to replace coal, meaning that the flow of LNG to Asia will lead to higher gas demand, pollution and the replacement of renewable energy sources.
- But maintaining 1.5°C means no new oil and gas fields or LNG expansion – and a rapid phase-out: The IEA reiterates that, as in previous versions of NZE, no new fields are needed. The recent IEA report on field decline rates as well That’s it Some fields must close early. The IEA also stresses that “many LNG projects currently under construction are no longer necessary.” Combined, demand for oil and gas will fall by about 35% by 2035 and 55% by 2040 in this year’s New Zealand. While the IEA argues that continued investments in fossil fuel infrastructure in recent years have pushed the world to the brink of exceeding 1.5°C, a path that “mitigates the most severe risks from climate change remains feasible” – with “reducing emissions as far and as quickly as possible” the key way to reduce overshoot and avoid gambling on unproven carbon removal technologies.
- The IEA rightly highlights that more finance is key to achieving a rapid and just transition – but it incorrectly repeats myths about the role private finance plays: The World Economic Outlook shows that much greater investments in grids, storage, energy efficiency, and energy access are needed in developing countries (excluding China) to enable a faster energy transition – but unfortunately it repeats the widely held myth that mobilizing private finance is the answer, even though it is typically ill-suited to cover these technologies and countries. Instead, evidence supports developing countries seeking to place greater emphasis on rich governments fulfilling their aid commitments general Financing (Article 9.1) at the 30th COP in Belém. OCI research shows that current approaches to mobilizing private finance are working well 4-7 times less than private investment From what you promised; In this year’s World Economic Outlook, the IEA itself acknowledges that every public dollar of international public financing today mobilizes only $0.60 in private capital. Rich countries It can mobilize more than $6 trillion annually By ending fossil fuel subsidies, taxing polluters, and changing unfair global tax, trade and debt rules.
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