2025 climate reality check: Trump threats, coal demand and AI
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2025 begins amid fresh signs that steering global energy use away from fossil fuels will be even harder than many governments and C-suites once hoped.
Why it matters: The world is already far off pace from meeting Paris Agreement targets and emissions keep rising — even as climate harms pile up.
Here's a quick tour of the latest reality checks ...
Global coal demand is proving very persistent. The International Energy Agency's latest outlook is more pessimistic than the 2023 and 2022 versions on the most CO2-heavy fuel (h/t @JavierBlas).
- Coal use reached another all-time high last year, defying an earlier prediction of decline. But IEA sees only small growth — largely a plateau — through 2027.
The mammoth scale of AI-driven data center power needs is really coming into focus.
- A new Energy Department report sees data centers accounting for up to 12% of U.S. power demand in 2028.
- The growth is likely to boost gas in the near- to medium-term.
President-elect Donald Trump is vowing to nix Biden administration climate policies and plans to exit the Paris Agreement.
Other national targets could face peril as deadlines loom and elections unfold in Canada and elsewhere.
Big banks are recalibrating, too. In recent days and weeks, a number of Wall Street giants like Morgan Stanley and CitiGroup left the UN-affiliated Net-Zero Banking Alliance.
- Banks, however, say they remain committed to their climate goals.
Big Oil has slowed its roll. European giants Shell and BP have gotten more selective about renewables, even as they maintain 2050 net-zero targets.
- Shell has softened some climate goals, and watch BP's February strategy update after Reuters reported it will scrap 2030 oil and gas production-cutting aims.
What's next: S&P Global Commodity Insights sees overall 2025 global energy demand growth once again outstripping additions of clean sources.
- "While the supply of clean energy is growing faster than it ever has in history...it is not yet fast enough to curtail the growth in fossil fuel demand, let alone displace existing fossil fuel consumption," their recent 2025 outlook states.
- Aside from the pandemic and other big recessions, clean supply — renewables and nuclear — has never had a year that outpaced rising consumption.
The intrigue: Veteran analyst Arjun Murti, in a recent post, argued the "energy transition era" ended in 2024.
- It began 2019 with the rise of net-zero commitments and Wall Street focusing heavily on the "E" in ESG, he said.
- Now, he said, things are moving toward a "healthier" conversation centered on everyone deserving the energy abundance of the select few in Western nations.
The bottom line: National and corporate targets are "really hard to achieve in the real world," said Daniel Raimi of the nonpartisan think tank Resources For the Future.
- Still, Some nations are making progress (albeit not hitting their goals). "They are demonstrating that energy transition is possible. It just hasn't happened at a global scale yet," he said.
