In a significant reversal that challenges global climate narratives, the International Energy Agency has walked back its earlier prediction that fossil fuel demand would peak before 2030. The sobering reality emerging from the agency's latest World Energy Outlook reveals that the transition to clean energy is happening much slower than anticipated.
The Great Backtrack: IEA's Changing Forecasts
Just two years ago, IEA Executive Director Fatih Birol made headlines with his bold declaration that the world was approaching a historic turning point. The agency had unequivocally stated that fossil fuel demand would peak before the end of this decade, with Birol emphasizing in 2023 that this was the first time a peak was visible for each fuel type earlier than many anticipated.
That optimistic projection has now been substantially revised. The IEA's 2025 World Energy Outlook, published on November 12, presents a more cautious picture. While coal demand might still reach its zenith relatively soon, oil may not peak until around 2030, and natural gas consumption is expected to keep growing until at least 2035.
Addition Rather Than Substitution
The core issue identified in the latest analysis is that the current energy transition is characterized by addition rather than substitution. Renewable energy sources are topping up fossil fuels rather than replacing them, creating a scenario where overall energy consumption continues to grow while clean energy expands.
Several factors are driving this trend. Electricity demand is exploding as economies electrify transportation and heating systems. The shift from gasoline cars to electric vehicles and from gas boilers to heat pumps is creating unprecedented power requirements. Additional demands from data centers, cooling systems, and water desalination plants are further straining energy grids.
Solar and wind power are capturing a significant portion of this incremental demand, but nuclear, coal, and gas-fired power plants remain essential to meet the growing needs. The IEA now suggests that this addition phase could last for 25 years or more before genuine substitution begins.
Political Realities and Data Gaps
The IEA's shifting forecasts highlight the challenge of balancing political aspirations with energy realities. The agency had previously moved from its Current Policy Scenario to a Stated Policies Scenario that incorporated policy proposals even when specific implementation measures were lacking.
This approach effectively mixed actual policy with political promises, leading to overly optimistic projections about the pace of energy transition. The revised forecasts acknowledge that governments, particularly the United States, are emphasizing preservation of the energy status quo rather than rapid transformation.
The agency has now revived its Current Policy Scenario, which shows neither oil nor gas demand peaking until at least 2050. Even under the more optimistic Stated Policies Scenario, oil demand is now expected to peak around 2030 rather than before the decade ends.
The most critical insight from the latest data isn't the precise timing of peak demand but the shape of the consumption curve. Oil demand is projected to remain near current levels of approximately 100 million barrels per day, potentially growing to 113 million barrels by 2050 under current policies or declining slightly to 97 million barrels under stated policies.
This reality check provides a foundation for more honest discussions about the benefits and costs of changing course in global energy policy. As the data clearly shows, fossil fuels remain deeply entrenched in the global energy system, and transitioning away from them will require more time and different strategies than previously acknowledged.
