Despite the US slowing its energy transition due to policy reversals, the global shift towards cleaner energy continues.
This is driven by China's renewable advancements and energy security concerns.
While US emissions will rise, the global energy mix will still balance between fossil and non-fossil fuels by 2050, with security now a key driver of energy policy.
The global shift to cleaner energy is pressing ahead despite a marked slowdown in the United States, according to DNV’s Energy Transition Outlook 2025.
The annual report of DNV, an independent multinational risk management and assurance firm, warned that while US policy reversals will delay emission cuts at home, the world’s transition remains on course, powered by record renewable deployment in China and reinforced by energy security concerns across regions.
The US has rolled back key climate policies, prioritising fossil fuels over renewables. As a result, annual carbon dioxide emissions are expected to be 500–1,000 million tonnes higher than previously forecast through 2050, delaying progress by roughly five years.
But the global effect is marginal: DNV projects the energy mix in 2050 will still be split almost evenly between fossil (51 per cent) and non-fossil fuels (49 per cent), with worldwide emissions only about 4 per cent higher than estimated in last year’s outlook.
“From a US perspective, this is a setback,” said Remi Eriksen, group president and chief executive of DNV. “But the global energy transition is not stalling — it is evolving. Momentum is shifting to regions that are doubling down on clean technologies. Security has become the dominant driver of energy policy, and paradoxically, this is accelerating the shift to renewables.”
China is consolidating its position as the global leader in renewable energy, expected to install 390 GW of solar PV and 86 GW of wind capacity this year alone, accounting for more than half of new global additions. Its low-cost clean technology exports — from solar panels and batteries to electric vehicles — continue to accelerate adoption elsewhere.
“China’s scale and speed are rewriting the rules of global energy,” said Daniel Cho, energy policy expert at Seoul National University. “The combination of domestic buildout and aggressive exports means the centre of gravity has shifted eastward.”
Europe, meanwhile, is striving to balance industrial competitiveness with its climate commitments. While renewables remain central to EU plans, the region is expected to fall short of its 2030 targets. Still, energy security priorities, particularly reducing reliance on imported fossil fuels, will cut European emissions by an additional 9 per cent by 2050, the report finds.
The report emphasises that energy security has overtaken climate ambition as the primary force shaping national policies. This is leading to greater investment in renewables and nuclear, as governments seek domestic, reliable energy sources.
Globally, DNV forecasts that security-driven policies will make emissions 1-2 per cent lower per year than they would otherwise be. Nuclear power, for instance, is projected to provide 9 per cent of global electricity in 2060 — a third more than if security concerns were absent.
“Security has become the new climate,” Eriksen added. “Governments are not just chasing decarbonisation — they are insulating themselves from geopolitical risks. That makes renewables and nuclear strategic assets.”
The report also warned of the rising power appetite of artificial intelligence. By 2040, data centres will consume 5 per cent of global electricity, with AI alone accounting for 3 per cent. In North America, that share is far higher — 16 per cent of all electricity, with 12 per cent from AI.
“AI’s energy hunger is real, but perspective is vital,” said Sofia Lindgren, lead technology forecaster at DNV. “Electric vehicle charging and cooling demand will still outpace AI globally. The challenge is ensuring these new loads are met with clean, reliable power.”
Despite progress, the world remains far from meeting the Paris Agreement targets. DNV forecasts global CO2 emissions will decline 43 per cent by 2050 and 63 per cent by 2060, but Net Zero will only be achieved after 2090. The 1.5°C carbon budget will be exhausted in 2029 and the 2°C budget in 2052, putting the planet on track for 2.2°C of warming by 2100.
Electricity will be at the heart of the transition, growing by 120 per cent through 2060 to supply 43 per centof global energy demand, up from 21 per cent today. Solar PV alone will exceed 3,000 GW of capacity this year, with China installing more than double Europe’s capacity. Behind-the-meter solar and batteries are also set to thrive, projected to supply 13 per cent of global electricity by 2060.
“In several sectors, technology progress and cost reduction are driving the transition forward,” Eriksen concluded. “But in harder-to-decarbonise industries, far stronger policy support is still needed. The global direction of travel is clear — the question is whether we move fast enough.”