IEA: Renewables Still Outpace Fossil Fuels Despite U.S. Policy Shift — 1.5°C Target Slips Further Out of Reach

Renewables grow fastest even as U.S. policy changes shift projections

The International Energy Agency (IEA) says renewable energy continues to expand faster than any other major energy source worldwide, led by solar photovoltaics, despite recent policy shifts in the United States. The findings are published in the IEA's 518-page World Energy Outlook, released as world leaders convened for the UN COP30 climate conference in Belém, Brazil.

Three scenarios, very different outcomes

The report models three pathways for the global energy system: the Current Policies Scenario (CPS), which reflects measures already in place; the Stated Policies Scenario (STEPS), which includes declared government plans even if not yet enacted; and a Net Zero by 2050 pathway.

Under CPS, global oil and natural gas demand would rise about 16% by 2035 and continue increasing toward 2050. By contrast, in STEPS oil demand is projected to peak around 2030, fall to roughly 100 million barrels per day by 2035, and decline thereafter. In the Net Zero scenario, fossil fuel demand falls sharply and global temperatures eventually return closer to the 1.5°C goal by the end of the century.

'The pace varies, but renewables grow faster than any other major energy source in all scenarios, led by solar photovoltaics,' the IEA said.

Regional dynamics and fast-growing markets

China is central to the renewable expansion: the IEA projects China will account for between 45% and 60% of global renewable deployment over the next decade across the scenarios. The report also finds that, in one modeling variant, U.S. policy changes could result in roughly 30% less installed renewables capacity in the United States by 2035 compared with last year's Outlook — yet global renewable deployment continues to accelerate overall.

Rising electricity demand is another major driver of change, fueled by expanding data centers and artificial intelligence workloads in advanced economies and China, as well as growing air-conditioning use in developing countries.

Climate implications: 1.5°C increasingly at risk

Despite robust renewable growth, the IEA warns that none of the pathways modeled — except the Net Zero by 2050 scenario — keep warming below 1.5°C above pre-industrial levels. The report states there is 'less momentum than before' on emission reductions while climate risks are increasing.

• Under CPS, warming would exceed 2°C around 2050 and reach about 2.9°C by 2100.
• Under STEPS, warming passes 2°C by roughly 2060 and reaches about 2.5°C by 2100.
• Under the Net Zero scenario, warming peaks near 1.65°C around 2050 and gradually declines, falling below 1.5°C by 2100.

The Outlook has drawn criticism from some quarters for including the CPS pathway; critics say its inclusion reflects political pressure following objections from the U.S. administration to earlier IEA forecasts. The IEA says it must balance transparency about current policies with scenarios that reflect stated ambitions and more ambitious climate goals.

What this means

The report underscores two simultaneous truths: renewables — especially solar — are expanding rapidly, but current national policies and stated plans are not yet sufficient to meet the Paris Agreement's most ambitious goal. Policymakers face a choice: accelerate deployment and supportive policy to bend the emissions curve down, or allow fossil fuels to retain a larger role with greater long-term warming and risk.

Key takeaway: Renewables are winning market share globally, but without stronger policies and faster action, the world is likely to exceed safe warming thresholds.