As the dust settles on what has been a tumultuous year of elections, geopolitical tension and global debates on emissions, 2025 looks set to be a pivotal year in the fight against climate change, securing energy stability, and fostering sustainable economic growth. For governments around the world, this moment marks a critical juncture to accelerate efforts that have been deliberated for years but largely remain unfulfilled. While issues such as the cost of living and geopolitical tensions have dominated headlines in 2024, it is clear the time to act on climate change has arrived.

This year has been a year of significant elections, with nearly half of the world’s population heading to the polls in over 60 countries, including in several European Union nations. Despite the urgency of climate action, most campaigns sidelined environmental issues in favor of more immediate concerns, such as inflation, energy prices, and national security. While voters naturally prioritize matters that affect their daily lives, the continued neglect of climate action risks burdening future generations with even more severe environmental challenges. All eyes are also on the US, and the question remains whether the incoming administration of President-elect Donald Trump will backtrack on the country’s climate commitments.

A key moment at the end of 2024 was the conclusion of the COP29 summit in Baku, Azerbaijan, where world leaders gathered to discuss the future of the global energy system.

The COP29 summit underscored the critical crossroads at which the world’s energy system finds itself, with climate finance emerging as a central theme. One of the outcomes was the pledge from developed nations to provide $300 billion annually in climate finance by 2035 — triple the current target, although still far below the $1.3 trillion per year requested by developing nations. This commitment aims to support emerging economies in their transition away from fossil fuels, build resilience against climate impacts, and address the losses and damages caused by natural disasters. This is a step in the right direction; however, as always, the real challenge will lie in translating these pledges into concrete, measurable actions.

The year 2025 is set to be one where this transformation must begin in earnest. By February next year, countries are expected to submit updated Nationally Determined Contributions (NDC), outlining how they will reduce emissions and adapt to climate impacts. Current plans fall significantly short, as highlighted in the 2024 UN Nationally Determined Contributions Synthesis Report. The next round of national climate plans must represent a substantial increase in both climate action and ambition. Governments must fulfill the commitments made at COP29, ensuring that both climate finance pledges and ambitious emission-reduction targets are fully realized.

Balancing energy security with the goals of energy transition requires addressing both short-term and long-term needs. Oil and gas will continue to play a crucial role in the global energy mix for decades. While oil demand may peak within the next decade, more than half of today’s oil consumption will still be necessary by 2050. Renewable energy is, however, considered to be key to achieving long-term, secure, reliable, and affordable energy. According to Rystad Energy’s Global Energy Scenarios 2024 report, over 90% of the global population lives in regions where renewable resources can meet or exceed future energy needs, while more than 80% live in countries dependent on imported fossil fuels. Renewables provide a decentralized, stable, and locally sourced energy supply, reducing reliance on volatile global markets and improving energy security.

In conclusion, while the dust may be settling after the events of 2024, the work ahead is just beginning. Governments must seize the moment in 2025, committing to bold actions that will accelerate the transition to a sustainable energy future. This is achievable if the right investments, policies, and regulatory reforms are put in place — and solutions will need to be tailored to each country’s unique context.

At Rystad Energy, we understand the complexities of the global energy system and the various pathways to achieving net-zero emissions. We track all energy sources, from production to consumption, providing reliable data, projections, and strategic advice that help governments and companies plan for the future. Our mission is to support a responsible energy transition, ensuring energy is accessible to all while achieving ambitious climate goals.

Source:

1). United Nations Framework Convention on Climate Change, FCCC/PA/CMA/2024/10

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