The International Energy Agency has sent shockwaves through climate policy circles with its latest World Energy Outlook, releasing a dramatically revised forecast that resurrects a scenario where global fossil fuel demand continues climbing for the next quarter-century. The report, published as world leaders gather for climate negotiations, marks a significant reversal from the agency’s recent messaging about imminent peaks in oil, gas, and coal consumption.
Under the newly resurrected Current Policies Scenario, oil demand would surge to 113 million barrels per day by mid-century, representing a 13 percent increase from 2024 consumption levels. Natural gas demand would climb even more steeply, rising 31 percent above current levels by 2050, while coal would decline to just a fifth below today’s consumption. The sobering projection paints a future where global temperatures would reach 2.9 degrees Celsius above pre-industrial levels by 2100 and continue rising thereafter.
The reintroduction of this pessimistic scenario comes after sustained pressure from the Trump administration, which has vocally criticized the IEA’s recent forecasts suggesting fossil fuel demand would peak before 2030. The agency had discontinued the Current Policies Scenario in 2020, declaring it “difficult to imagine” such a pathway prevailing in contemporary circumstances. Now, following what Politico described as a “ratcheted-up US pressure campaign” and months of public frustration from Trump administration officials, the scenario has returned to prominence in the 2025 outlook.
The United States, which contributes 14 percent of the IEA’s budget, has led efforts to challenge the agency’s climate-focused analysis. Republican critics have argued that the IEA’s projections showing near-term peaks in oil and gas demand have discouraged investment in fossil fuels. The Current Policies Scenario now appears first in the report’s detailed analysis and data tables, receiving nearly equal attention to the Stated Policies Scenario that previously dominated the agency’s messaging.
The Current Policies Scenario represents far more than business as usual. The pathway assumes countries worldwide would abandon their climate commitments and policy intentions, following only legislation already codified into law. Under this framework, Japan and South Korea would fail to implement their latest national electricity plans, China would abandon its power market reforms and provincial clean energy targets, and European Union nations would renege on coal phase-out pledges. California and other US states would fail to extend clean energy targets, while Brazil, Turkey, and India would scrap their planned greenhouse gas emissions trading schemes.
The scenario further assumes that major economies including the EU, China, India, Australia, and Japan would fail to extend or strengthen regulations on building and appliance energy efficiency, as well as vehicle fuel economy standards. This represents not a continuation of current trends, but rather a wholesale retreat from stated climate ambitions across the globe.
Despite the alarming trajectory of the Current Policies Scenario, the IEA’s analysis still shows fossil fuel demand peaking before 2030 under its Stated Policies Scenario, which assumes governments follow through on their announced intentions. Coal demand appears to be at or very close to a definitive peak, with consumption declining as cheaper renewable energy electricity displaces coal-fired generation. Oil demand would plateau around 2030 as electric vehicles and more efficient combustion engines erode petroleum consumption in transportation. Natural gas demand would continue growing until 2035 before leveling off.
However, even the more optimistic Stated Policies Scenario reflects significant upward revisions from the previous year’s outlook. Coal consumption in 2030 now comes in approximately 6 percent higher than previously expected, though it ultimately declines to similar levels by 2050. Oil demand in 2050 ends up 5 percent higher than last year’s projection, reflecting a shallower post-peak decline. The most dramatic shift involves natural gas, with demand now expected to peak in 2035 rather than 2030, and 2030 consumption projected at 7 percent above last year’s forecast.
The revised projections stem partly from higher electricity demand driven by artificial intelligence data centers and increased air conditioning use in warming regions. Natural gas output in 2035 is now projected to be 350 billion cubic meters greater than forecast last year, roughly equal to Texas’s annual gas production. Three-quarters of this increase serves electricity generation, mainly in the United States, Japan, and the Middle East, reflecting higher electricity demand and slower renewable energy deployment than previously anticipated.
Global investment in data centers is expected to reach 580 billion dollars in 2025, with over 85 percent of capacity growth occurring in the United States, China, and Europe. Data centers will account for half of projected electricity demand growth in the United States through 2030, compared to just 6 to 10 percent in the EU and China. Combined with demand for air conditioning in the Middle East and North Africa, the International Energy Agency has increased its overall 2035 electricity use forecast by 4 percent, equivalent to adding India’s entire annual electricity generation.
The natural gas surge poses particular challenges for climate goals. Even in the Stated Policies Scenario, gas demand continues growing into the 2030s due mainly to US policy changes and lower gas prices. Under the Current Policies Scenario, oil and natural gas demand would increase 16 percent by 2035 and continue rising through 2050. This trajectory directly contradicts the agency’s Net Zero Emissions by 2050 scenario, which calls for no new investment in oil and gas fields to keep global warming limited to 1.5 degrees Celsius.
The Stated Policies Scenario now projects global warming reaching 2.5 degrees Celsius by 2100, up marginally from 2.4 degrees in last year’s outlook. This assumes governments implement their announced policy intentions as the IEA judges feasible. The agency emphasizes it does not give aspirational targets a free pass, subjecting them to assessment of market, infrastructure, and financial constraints.
The report notes that 48 countries have introduced major new climate policies since the previous outlook, including the United States’s new direction withdrawing from the Paris Agreement, Brazil’s energy transition acceleration program, Japan’s plan for 2040, and the European Union’s recently adopted 2040 climate target. These policy shifts have created new uncertainty about the trajectory of global energy markets and climate action.
Under the Stated Policies Scenario, clean energy deployment would surge dramatically despite the headwinds. Nuclear power output would grow 39 percent above 2024 levels by 2035 and double by 2050. Solar generation would increase nearly four-fold by 2035 and nearly nine-fold by 2050, while wind power would nearly triple and quadruple over the same periods. Renewables would overtake oil to become the world’s largest energy source, not just for electricity but across all energy uses, by the early 2040s.
Remarkably, even the Current Policies Scenario shows strong clean energy growth. Renewables would still become the world’s largest energy source before 2050, despite severe assumed headwinds including electric vehicles never increasing from their current low market share in India or the United States. This reflects the robust economics and mature policy frameworks already supporting clean energy deployment, which would continue driving adoption even if governments retreat from further climate action.
The cost advantage of clean technologies has become increasingly difficult to ignore. Solar, wind, and battery costs have fallen 90 percent, 70 percent, and 90 percent respectively since 2010, with further declines of 10 to 40 percent expected by 2035. The report notes that household energy spending would actually be lower under the more ambitious Net Zero Emissions scenario than under stated policies, despite requiring greater investment.
The Net Zero Emissions scenario, which would limit warming to 1.5 degrees Celsius by 2100, now includes a significant “overshoot” period where temperatures would peak at 1.65 degrees Celsius before declining. The IEA attributes this overshoot to the reality of persistently high emissions in recent years. Achieving the 1.5 degree target would require not only rapid transformation of the energy sector but also widespread deployment of carbon dioxide removal technologies currently unproven at large scale.
Climate advocates have strongly criticized the resurrection of the Current Policies Scenario. Environmental organizations describe it as portraying a US administration fantasy rather than reflecting the reality of today’s rapidly evolving energy markets. They argue the scenario implausibly assumes existing policies and technology trends freeze or roll back, creating what one group called “Donald Trump’s dystopian future” of high pollution and unmitigated climate disaster.
The IEA itself acknowledges the Current Policies Scenario represents more than business as usual. In an article published ahead of the outlook, the agency explained that in an energy system where new technologies are already deployed at scale with robust economics and mature policy frameworks, business as usual would actually imply continuing and potentially accelerating current change. The Current Policies Scenario instead builds on a narrow reading of policy settings, assuming no change even where governments have indicated their intention to act.
The agency gives short shrift to suggestions that coal demand might continue growing rather than declining. It explains that sustained growth for coal appears highly unlikely given two crucial structural trends: the rise of renewable power generation and China’s shift away from its especially coal-intensive growth model. These trends would have to reverse for coal growth to materialize, a development the IEA considers implausible.
The outlook omits the Announced Pledges Scenario that typically assesses the impact of countries meeting all their climate commitments on time and in full. The IEA says it will publish this scenario later once there is a more complete picture of the new national climate pledges countries are developing ahead of the deadline for updating their commitments. Many countries missed earlier deadlines to publish updated pledges before the current climate summit.
The competing scenarios in the World Energy Outlook reflect fundamentally different assumptions about global policy trajectories. The Current Policies Scenario assumes countries worldwide follow the United States in dismantling plans to shift away from fossil fuels, abandoning climate commitments and failing to honor pledges. The Stated Policies Scenario assumes governments largely implement their announced intentions, subject to feasibility constraints. The Net Zero Emissions scenario shows the transformation needed to limit warming to 1.5 degrees Celsius, though achieving this target now requires temporary overshoot and unproven carbon removal technologies.
The dramatic divergence between these pathways underscores the critical importance of policy choices made in the coming years. Under current policies, fossil fuel companies would see demand for their products continue growing for decades, while the planet hurtles toward nearly 3 degrees of warming. Under stated policies, fossil fuels would peak and decline this decade, though not fast enough to meet the 1.5 degree target. Only the Net Zero Emissions pathway avoids catastrophic climate impacts, but it requires immediate and sustained action that currently appears out of reach.
The World Energy Outlook arrives as climate negotiators gather to discuss accelerating emissions reductions and supporting vulnerable nations facing climate impacts. The report’s competing visions of the energy future will likely fuel debates about whether the clean energy transition has sufficient momentum to continue despite political opposition, or whether fossil fuel expansion remains the path of least resistance for energy-hungry economies.
The United States emerges as a central figure in the report’s analysis, both as a source of uncertainty through its policy reversals and as a major driver of electricity demand growth through data center expansion. American natural gas production and consumption patterns diverge sharply from global peers, with the country simultaneously increasing fossil fuel output while facing surging electricity needs from artificial intelligence. This combination makes the United States distinct from other major economies and creates ripple effects throughout global energy markets.
Energy security considerations have led some countries to accelerate electrification efforts, reducing dependence on fossil fuel imports including from the United States. China in particular has emphasized electrifying broader segments of its economy to enhance energy independence, a trend other nations are following. This shift could ultimately accelerate the displacement of fossil fuels even if some governments retreat from explicit climate policies.
The outlook’s publication during a climate summit adds urgency to debates about fossil fuel phase-out timelines and investment in new oil and gas infrastructure. Environmental groups emphasize that even the optimistic Stated Policies Scenario shows oil and coal peaking by 2030, confirming that no single country can stop the global energy transition. However, they warn that governments must reject what they describe as unrealistic scenarios assuming policy reversals and instead choose a fast, fair, and funded fossil fuel phase-out.
The fundamental question posed by the competing scenarios is whether the world will continue on the trajectory of recent years, with falling clean energy costs and strengthening climate policies driving fossil fuel decline, or whether political resistance will slow the transition and lock in decades of additional fossil fuel growth. The answer will determine not just the future of energy markets, but the fate of the climate and the billions of people vulnerable to warming impacts.
The IEA’s analysis suggests that even in the absence of new climate policies, clean energy deployment has sufficient momentum from existing economics and regulations to eventually displace fossil fuels as the dominant energy source. However, the timeline matters enormously for climate outcomes. A transition completed by 2050 versus one dragging into the second half of the century means the difference between manageable warming and catastrophic impacts.
As policymakers digest the World Energy Outlook’s competing visions, the choice before them crystallizes. They can lean into the clean energy transition, accelerating fossil fuel decline and bending the emissions curve downward to limit warming. Or they can retreat from climate commitments, locking in fossil fuel growth and accepting the mounting costs of climate change. The scenarios sketched by the IEA make clear that this choice, while difficult, remains within humanity’s grasp.
