WEO shows oil and coal still set to peak, contrary to U.S.-pushed narrative, but urgent action needed to speed fossil fuel phase-out to keep 1.5ºC alive

Today, the International Energy Agency (IEA) released the 2025 edition of its flagship report, the World Energy Outlook (WEO), finding that oil and coal demand are still on track to peak by 2030 in its business-as-usual scenario (STEPS), driven by the unstoppable growth of renewable energy and electrification – but that this falls far short of what is needed for the 1.5ºC survival limit.

Crucially, the IEA clarifies that the Current Policies Scenario (CPS), an obsolete, fossil-fuel heavy scenario reintroduced under U.S. pressure, does not reflect ‘business-as-usual’. Instead, it implausibly assumes that existing policies and technology trends freeze or roll back, portraying a U.S. administration fantasy rather than the reality of today’s rapidly evolving energy market.

While the Trump administration and fossil fuel allies continue to promote this outdated vision, the WEO makes clear that the fastest, cheapest, and healthiest path forward is a rapid transition to renewable energy. The Net Zero Emissions (NZE) scenario, would deliver the most affordable energy and fastest path to full energy access, compared to a future of high energy prices, high death rates from air pollution, and unmitigated climate disaster under the CPS, which could be labeled a ‘Crude Pipedream Scenario.’

Crucially, both the CPS and the business-as-usual scenario see little relief from the current energy affordability crisis plaguing households and businesses while the NZE sees costs stabilize and decline by the mid-2030s.

In response, David Tong, Global Industry Campaign Manager at Oil Change International said:

“This year’s World Energy Outlook sets out a stark and simple choice: we can protect people and communities by safeguarding 1.5ºC, settle for a disastrous business-as-usual 2.5ºC, or choose to backslide into a nightmare future of much higher warming. Holding warming to 1.5ºC means no further delay, no new fossil fuels, and public planning and funding to guarantee a just energy transition. Yet the U.S. is trying to put this path – the only route to survival – beyond reach by reviving an outdated, fossil-fuelled scenario that assumes governments abandon their efforts and progress stalls.

“Crucially though, the IEA has also confirmed that no single country can stop the energy transition, with oil and coal demand to peak by 2030 in its business-as-usual scenario, and with gas to follow soon after. And, again, it has reconfirmed that there is no investment in new oil and gas fields for 1.5ºC.

“But this year’s report also shows Donald Trump’s dystopian future, bringing back the old, fossil-fuel intense, high pollution Current Policies Scenario, charting an unrealistic pathway where governments drag their energy policies backwards and rates of renewable energy adoption stall, leading to high energy prices and unmitigated climate disaster. At COP30, governments must reject this nightmare fantasy, uphold a just transition, and choose a fast, fair, and funded fossil fuel phase-out.”

Notes to Editors

• The WEO shows climate safety is cheaper than continued fossil fuel dependence: The WEO makes clear the benefits of governments acting on their legal duty to uphold the 1.5°C survival limit by implementing the fast, fair, funded transition away from fossil fuels they agreed at COP28: The NZE scenario leads to the lowest household energy bills through greater efficiency and lower fuel costs, increases overall energy system resilience, delivers full energy access by 2030, and saves 2 million lives through reduced air pollution – before factoring in the avoided costs of climate damage from holding temperature rise as low as possible. In NZE, countries currently reliant on fossil fuel imports see these bills slashed by more than two-thirds by 2035.
• A fossil fuel peak is nearing: A peak in fossil fuels is still expected under the baseline trajectory of STEPS, which sees a near-tripling of renewable capacity by 2035, even after accounting for U.S. policy backsliding. The IEA expects coal to decline before 2030, oil to peak around 2030, and gas to peak around 2035. A surge in gas supply led by the U.S. is what drives baseline gas demand projections somewhat higher, by depressing near-term prices. This is not inevitable and other governments and U.S. subnational leaders can and must speed a renewable roll-out instead to avoid fossil fuel-driven volatility. Contrary to industry claims, the IEA sees marginal prospects for gas to replace coal, meaning an influx of LNG in Asia will lead to higher gas demand and pollution and displace renewables.
• But safeguarding 1.5°C means no new oil and gas fields or LNG expansion – and a fast phase-out: The IEA reconfirms that, as in past editions of the NZE, no new fields are needed. The IEA’s recent report on field decline rates further concluded some fields must close early. The IEA also confirms “many of the LNG projects currently under construction are no longer necessary.” Combined oil and gas demand falls by around 35% by 2035 and 55% by 2040 in this year’s NZE. While the IEA sees that continued investments in fossil fuel infrastructure in recent years have pushed the world to the brink of exceeding 1.5°C, a pathway that “mitigates the most severe risks from climate change remains feasible” – with “reducing emissions as far and fast as possible” the key way to minimize overshoot and avoid gambling on unproven carbon removal technologies.
• The IEA rightly highlights that more finance is key to a fast and fair transition – but wrongly repeats myths on the role for private finance: The WEO shows much greater investment is needed in grids and storage, energy efficiency, and energy access in developing countries (excluding China) to enable a faster energy transition – but unfortunately repeats the widespread myth that private finance mobilization is the answer, despite typically being ill-suited to cover these technologies and countries. The evidence instead backs developing countries’ push for an increased focus on rich governments meeting their obligation to provide public finance (Article 9.1) at COP30 in Belem. OCI research shows that existing approaches to private finance mobilization deliver 4-7 times less private investment than promised; in this year’s WEO the IEA itself acknowledges that every public dollar of international public finance today mobilizes only USD 0.60 of private capital. Rich countries can mobilize over $6 trillion annually by ending fossil fuel subsidies, taxing polluters, and changing unfair global tax, trade, and debt rules.