IEA: The Future of Energy, Net Zero Goals & Fossil Fuel Use

Global energy demand has increased by nearly 60% since 2000, according to the International Energy Agency (IEA).

The agency's 2025 World Energy Outlook provides projections on future energy demand and recommendations for achieving sustainability.

The report arrives during a period of considerable change, marked by evolving global markets, geopolitical tensions and policy changes.

Projecting future energy demand

The IEA presents multiple pathways for the global energy mix.

The Current Policy Scenario (CPS) suggests oil and natural gas demand will grow until 2050, with renewables leading overall growth.

A separate Stated Policies Scenario (STEPS) forecasts a peak in coal demand and stable oil consumption around 2030.

This scenario also indicates the US will have 30% less renewable capacity in 2035 than projected in 2024.

“We have the technologies we need to create a future built on clean, secure home-grown energy,” says Trevor Hutchings, CEO of the Renewable Energy Association.

“But the situation is delicate - if we lose momentum, we risk letting this opportunity for jobs and economic growth slip through our fingers.”

The IEA's Net Zero Emissions by 2050 (NZE) Scenario offers a pathway to limit global warming to 1.5°C, in line with the Paris Agreement.

This route relies on four pillars: clean energy electrification, enhanced energy efficiency, low-emissions fuels and methane abatement.

The scenario projects a near-quadrupling in sustainable fuel use by 2035, including biofuels, biogases and low-emissions hydrogen.

Navigating the pathway to net zero

The updated NZE Scenario accepts that an overshoot of the 1.5°C target is now likely, predicting temperatures will fall back below this limit by 2100.

Fatih Birol, Executive Director at the IEA, says governments must balance energy security with affordability, access and climate goals.

Fatih adds that the report's scenarios “illustrate the key decision points that lie ahead and... provide a framework for evidence-based, data-driven discussion over the way forward.”

The report also details the pressing issue of critical mineral supply chain security.

These minerals are essential for power grids, EVs, batteries, AI chips and defence systems.

The IEA notes that policy changes could create more resilient supply chains, highlighting that over half of these minerals face export controls.

The report stresses the need for supply security and promoting circularity.

Electricity growth and infrastructure challenges

Electricity's importance is a recurring theme.

The NZE Scenario projects electricity demand will grow by more than 50%, outpacing overall energy use growth.

While investment is flowing into electricity supply, underinvestment in grids and infrastructure remains a primary obstacle, creating congestion and potentially higher prices.

The expansion of data centres and AI has accelerated electricity demand, further straining existing grids.

“Analysis in the World Energy Outlook has been highlighting for many years the growing role of electricity,” says Fatih

“Last year, we said the world was moving quickly into the Age of Electricity – and it’s clear today that it has already arrived.”

Despite progress, significant energy access gaps persist, with 730 million people lacking electricity and 2 billion without clean cooking facilities.

These barriers impact health, limit economic opportunity and hinder global development.

In order to close the access gap, US$4bn is required each year for clean cooking from now until 2040 and around US$23bn each year for electricity until 2035.

Expanding access can improve productivity, promoting economic and energy demand growth.