Muhammad Hammad

Global trends

Global energy demand grew 1.3% in 2025, slower than 2024’s 2% growth, driven by solar PV (meeting >25% of demand growth) and natural gas (17%). Low-emission sources contributed 60% of growth. Fossil fuel demand rose slower: coal +0.4%, oil +0.65 mb/d, gas +1%. China’s growth slowed to 1.7%, US demand accelerated >2%.

CO₂ emissions rose 0.4% to a record 38 Gt, with weather and hydropower shortfalls pushing up emissions by 90 Mt. Advanced economies’ emissions rose 0.5%, while China’s fell 0.5% and India’s dropped for the first time in normal conditions.

Solar PV surged 600 TWh, cutting coal generation. The energy transition continues, with renewables and nuclear exceeding global electricity growth.

Oil

Oil demand grew 0.7% in 2025, slowing from 2024’s 0.75 mb/d growth, marking a structural deceleration. Petrochemical feedstock use weakened due to trade turmoil, while transport fuel growth was steady but offset by electrification and biofuels. Emerging markets drove growth, with Asia Pacific leading (+360 kb/d). China’s demand rose 220 kb/d, led by petrochemicals, while India’s growth slowed to 0.6% due to biofuels and a strong monsoon.

Advanced economies’ oil use is 4% below 2019 levels, with US growth (+170 kb/d) offset by EU, Japan, and Korea declines. China’s transport demand plateaued due to EVs and high-speed rail, while feedstock use surges. India’s LPG demand grew for clean cooking. Middle East demand was flat, with transport growth offset by falling power sector use.

Natural gas

Global natural gas demand grew 1% in 2025, slowing from 2.8% in 2024, due to weaker industrial activity and high LNG prices. The buildings sector drove 70% of growth, with cold weather boosting US and EU demand. Industrial and power sector growth was weak, with flat industry demand and 1% power sector growth.

Regional trends varied: US demand rose 1% due to cold winters, EU demand grew 3% driven by power and buildings, and Middle East demand rose 2.5% with oil-to-gas switching. Asia Pacific demand was flat, with China’s growth slowing to 2% and India’s declining 3.5%. Pakistan’s gas consumption fell 8% due to solar growth, while Bangladesh’s rose 4% driven by industry.

Coal

Global coal demand grew 0.4% in 2025, slowing from 1.4% in 2024, with modest increases in the US offset by declines in China and India. Coal power generation was flat, with declines in China (-1.5%) and India (-3%) balanced by US growth (+10%). Industrial coal demand continued shifting to emerging economies.

China’s coal use was flat, with solar, wind, and nuclear meeting electricity growth. India’s coal demand fell 1% due to a strong monsoon boosting hydropower. EU coal use dropped 5%, slower than previous years, with low hydro and wind output supporting coal power. US coal demand rose 10% due to higher gas prices and electricity demand.

Electricity demand

Global electricity generation raised 850 TWh in 2025, driven by renewables and nuclear, while fossil fuel generation declined. Coal-fired generation fell 0.5%, the first decrease outside a crisis period since 2015, as China’s and India’s output dropped. Solar PV grew a record 600 TWh, with China leading, and nuclear output hit a record high (+1.2%).

Technology: Electric vehicles

Electric car sales rose 20% to 21 million units in 2025, with one in four cars sold being electric. China led growth, with EVs capturing over 50% of car sales, driven by competition, prices, and model availability. Europe grew 30%, overtaking China as the fastest-growing major market, while the US declined 2% due to ended tax credits.

Emerging markets saw significant growth: India’s EV sales hit 2.3 million (+75%), Southeast Asia’s electric car sales more than doubled, and Latin America’s grew 70% to 350,000 units. China exported EVs to these markets, boosting sales. Electric heavy-freight trucks tripled to 200,000 units, and Europe’s electric medium/heavy trucks rose 40% to 3% market share.

Technology: Heat pumps

Global heat pump sales declined 2% in 2025, with mixed regional trends. China’s sales were stable, driven by reversible air conditioners, while Europe saw an 11% rise, led by Germany’s 55% growth in H1. France, Europe’s largest market, declined moderately.

US sales fell 13%, impacted by A2L refrigerant regulations and shortages, plus slower housing construction. Japan’s sales were flat, with heat pump water heaters gaining market share vs gas. Despite declines, heat pumps outsold gas boilers in Germany and the US for the fourth year.

Electricity supply

Global electricity generation raised 850 TWh in 2025, driven by renewables and nuclear, while fossil fuel generation declined. Coal-fired generation fell 0.5%, the first decrease outside a crisis period since 2015, as China’s and India’s output dropped. Solar PV grew a record 600 TWh, with China leading, and nuclear output hit a record high (+1.2%).

Technology: Solar PV and wind

Global renewable capacity additions rose 16% to 800 GW in 2025, marking a record year for the 23rd consecutive time. Solar PV led with over 600 GW added (12% growth), followed by wind (160 GW, +40%). China drove growth, adding 500 GW, with 370 GW solar and 117 GW wind.

Technology: Nuclear

In 2025, 3 GW of new nuclear capacity came online, offset by 3 GW retirements, keeping global capacity at 420 GW. China, India, and Russia each completed a reactor, while ten construction starts (9 in China, 1 in Russia) added 12.2 GW. With 78 GW under construction in 15 countries, China leads with half, targeting 100 GW by 2030. SMRs are emerging, with one operational in China and Russia, and more planned in Canada, Korea, UK, and US.

Technology: Battery storage

Battery storage is booming, with 108 GW added in 2025 (+40% YoY), now 11x 2021 levels. LFP batteries dominate (90% of deployments) due to cost and cycling advantages. China led (60% of additions), followed by the US and Europe, with Australia and Middle East showing strong growth. Storage durations are lengthening, with more 4+ hour projects. UPS growth (+30% to 45 GW) also surged, mainly in data centres.

CO2 emissions

Global energy-related CO2 emissions rose 0.4% to 38.4 Gt in 2025, with advanced economies’ emissions growing faster than emerging markets for the first time in 30 years. China’s emissions fell 0.5%, India’s dipped due to weather and renewables, while natural gas drove 85 Mt of emissions growth. Weather effects, including monsoons and droughts, contributed 90 Mt of emissions. Clean energy deployment avoided 35 EJ of fossil fuel demand, displacing coal, gas, and oil, and preventing 1.5 Gt CO2 from solar PV alone.