June 2025 – International Energy Agency (IEA) Headquarters
The International Energy Agency (IEA) has released its annual Global Energy Outlook for 2025, providing a detailed analysis of worldwide energy consumption patterns, key sectoral shifts, and emerging challenges in the transition toward a cleaner energy future. The report highlights that 2025 marks a pivotal year for global energy dynamics, driven by post-pandemic recovery, digital transformation, and accelerating climate action.
Key Highlights of the IEA 2025 Report
Global Energy Demand Hits Record High
Despite growing adoption of renewables, global energy demand has increased by 2.3% in 2025 compared to the previous year. Factors include:
- Expansion of electric vehicles (EVs) and charging infrastructure
- Rising demand for electricity in data centers and AI technologies
- Industrial recovery in emerging economies
Electricity accounts for nearly 22% of total final energy consumption, up from 18% in 2020.
Fossil Fuels Still Dominate—But Renewables Are Catching Up
- Oil and natural gas continue to dominate the global energy mix, making up over 56% of total supply.
- However, renewables (solar, wind, hydro) now represent almost 30% of global electricity generation.
- Coal usage is declining, particularly in Europe and North America, but remains strong in parts of Asia.
China, India, and Southeast Asia Lead Consumption Growth
- China remains the world’s largest energy consumer, accounting for 26% of global demand.
- India has become the fastest-growing energy consumer in 2025, driven by industrialization and urban expansion.
- Southeast Asia sees rising energy demand, particularly in residential and transport sectors.
Decarbonization and Energy Efficiency
The report emphasizes that energy intensity (energy use per unit of GDP) has improved by 1.8% globally. However, IEA warns this is still below the level needed to meet net-zero 2050 targets.
- Countries implementing carbon pricing, energy efficiency standards, and fossil fuel subsidy reform have seen better outcomes.
- Innovations in smart grids, battery storage, and green hydrogen are identified as critical for balancing supply and demand.
Key Challenges Identified
- Volatility in fossil fuel prices and supply chains due to geopolitical tensions
- Insufficient investment in grid modernization and battery storage
- Uneven access to clean energy technologies between high-income and low-income nations
The IEA calls for:
- $4 trillion in annual investment in clean energy infrastructure by 2030
- Stronger international cooperation to ensure a just and inclusive energy transition
- Accelerated deployment of solar, wind, and low-carbon technologies across all sectors
IEA Executive Director Fatih Birol stated:
“The window to achieve net-zero emissions by mid-century is closing fast. Governments and industries must act boldly and urgently to reshape the global energy landscape.”
