IEA: Will Global Fossil Fuel Demand Continue to Grow?

The global demand for energy has grown by nearly 60% since 2000, according to the International Energy Agency (IEA).

In the 2025 World Energy Outlook, the IEA examines the direction of travel of the energy industry, providing projections on where demand is headed and recommendations for how to tackle global sustainability goals.

It is updated annually to best reflect changes in energy technology and policies, with the first edition being released in 1999.

The report comes during COP30 and amid major changes in the energy sector, including shifts in global policies and markets and geopolitical tensions.

The IEA's projections for the global energy mix

In the IEA’s Current Policy Scenario (CPS), demand for oil and natural gas will continue to grow until 2050.

Renewables still meet the largest share of total energy demand growth under this scenario.

Its Stated Policies Scenario (STEPS) predicts a peak in coal demand alongside a flattening in oil use around 2030. This scenario would see the US have 30% less renewable capacity installed in 2035 than was predicted in the IEA’s 2024 report. 

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

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

The path to net zero

The IEA’s Net Zero Emissions by 2050 Scenario (NZE Scenario) translates the Paris Agreement’s 1.5°C global warming goal into a pathway for the energy sector.

The NZE Scenario is based on clean energy electrification, energy efficiency, low emissions fuels and methane abatement.

In the scenario, sustainable fuels, including liquid biofuels, biogases, low emissions hydrogen and hydrogen-based fuels, are widely deployed, almost quadrupling their use by 2035 from current levels.

The updated scenario reflects the UN Environment Programme’s (UNEP) statement that exceeding the 1.5°C target is now inevitable, predicting that the global average temperature increase falls back under the limit by 2100.

“With energy security front and centre for many governments, their responses need to consider the synergies and trade-offs that can arise with other policy goals – on affordability, access, competitiveness and climate change," says Fatih Birol, the Executive Director at the IEA.

“The World Energy Outlook’s scenarios illustrate the key decision points that lie ahead and, together, provide a framework for evidence-based, data-driven discussion over the way forward.”

Protecting critical mineral supply chains

One main issue outlined in the World Energy Outlook is the threat placed upon critical minerals supply chains.

Key critical minerals are vital for power grids, batteries and EVs, as well as AI chips, jet engines and defence systems.

As of November 2025, more than half of these minerals are subject to export controls.

The IEA says changing policies can help create more diverse and resilient supply chains for critical minerals.

The report shows that there needs to be increased security in the supply of these materials, including promoting circularity, in order for natural resources to be protected.

Global growth in electricity

The World Energy Outlook demonstrates the importance of electricity in today’s energy sector. In the NZE Scenario, electricity demand grows by more than 50%, faster than overall energy use.

Investors are spending more on electricity supply, with end-use electrification accounting for half of today’s global energy investment.

The main issue delaying the development of the electricity sector is the lack of investment in electricity infrastructure and grids.

This increases congestion in the production of electricity and increases prices.

The recent growth of data centres and AI has led to a boost in electricity demand, concentrated in advanced economies and China.

Investment in data centres is predicted to reach US$580bn in 2025.

New data centre expansions are expected over the next 10 years, specifically in the US, China and the European Union, with many located near existing data centres which puts strain on the grid.

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

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

Universal energy access

Around two billion people lack access to clean cooking and 730 million people are without electricity, the report shows.

The IEA says that barriers to energy access can impact health, economic opportunity and global development.

It states that households can gain access to clean cooking through the use of liquefied petroleum gas, electricity and biofuels.

By making the change to clean cooking energy, the IEA says there will be a reduction in premature deaths due to household air pollution by almost two thirds.

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.

Broadening energy access can help improve productivity in agriculture and local industries and promote economic and energy demand growth, the IEA says.