There is growing progress towards a secure, equitable and sustainable energy system, but momentum could stall amid financing and geopolitical challenges.

In 2024, there were underlying vulnerabilities across energy supply chains and markets, combined with record energy demand.

Conflicts disrupted trade flows while surging demand from electrification, including from artificial intelligence (AI)-driven data centres, pushed global energy demand up by 2.2% (the fastest pace in years). Despite continued expansion of renewables and improvement in energy efficiency, energy-related CO2 emissions reached a record high of 37.8 billion tonnes. Clean energy investment grew to over $2 trillion – double the 2020 levels, but well below the $5.6 trillion needed annually through 2030. Moreover, annual growth in investment slowed to 11% – down from 24-29% annually in the previous three years.

The 2025 Energy Transition Index (ETI) recorded a 1.1% year-on-year increase in global scores – over twice the average pace of the past three years.

The ETI is based on three system performance dimensions – security, equity and sustainability – and five enabling dimensions of transition readiness. System performance improved (1.2% y-o-y), though this was uneven across its three dimensions. Equity saw the strongest rebound, nearing pre-COVID-19 pandemic levels, supported by moderating energy prices and structural subsidy reforms. Sustainability maintained a steady upward trend as clean energy use increased. Security, however, stagnated, constrained by limited diversification, high import dependence and inflexible power systems in many countries. Transition readiness, which considers regulation, infrastructure, education, innovation and investment capacities, slowed to just 0.8% y-o-y, well below its 10-year trend.

Overall, 65% of countries improved their ETI scores in 2025, but only 28% simultaneously advanced across security, equity and sustainability, reflecting uneven progress. Sweden, Finland and Denmark retained the top three ranks, reflecting strong infrastructure, diverse low-carbon energy systems and long-term policy stability. China’s rank reached an all-time high of 12th place, driven by strong innovation capacity and the world’s largest clean energy investment volumes. The US ranked 17th, due in large part to strong security and improved sustainability. India advanced in energy efficiency and investment capacity.

Regional dynamics reinforce the multi-speed nature of the transition.

Emerging Europe and emerging Asia led regional improvements in transition readiness, but through distinct pathways. Emerging Europe advanced most in infrastructure (+8.3%) and education (+5.8%), while emerging Asia saw gains from investment (+18.7%) and regulations (+2.6%). Meanwhile, regions like Sub-Saharan Africa improved through stronger political commitment and financial flows – reinforcing the multi-speed nature of transition readiness.

Global energy systems are under growing pressure from climate, geopolitical and technological disruptions. Geopolitical and economic uncertainties, such as rising trade tariffs, have highlighted vulnerabilities in supply chains. These factors could create investment risks and shift government focus towards more immediate priorities, slowing progress moving forward.

Adaptive, locally tailored solutions will be crucial for scaling clean energy while ensuring resilience and affordability. Accelerating innovation will be essential, including by fully harnessing the performance opportunities enabled through AI, energy efficiency, clean fuels, storage, smart grids and other methods.

Five priorities stand out for building resilience:

1. Adopt stable, adaptive policy frameworks to attract long-term capital and cultivate cooperation.

2. Modernize energy infrastructure – especially grids, storage and interconnectors.

3. Invest in skilled talent to help boost innovation and execution capacity.

4. Accelerate clean technology commercialization, especially in hard-to-abate sectors.

5. Enhance capital investment in developing economies.

While momentum is improving, many systems remain vulnerable – reinforcing the need to align near-term gains with long-term readiness.