Amid rising disruption, energy transition progress remains uneven, necessitating adaptive strategies, targeted investment and redefined energy security.

The Energy Transition Index (ETI) provides a data-driven framework to assess how 118 countries are positioned to navigate the evolving energy landscape. It measures both system performance (security, equity and sustainability outcomes) and transition readiness (enablers of progress including infrastructure, policy and capital). This year’s results showed a modest recovery, driven by improved access and rising clean energy adoption. Yet, progress on long-term enablers – such as infrastructure, regulation and investment – slowed, exposing persistent vulnerabilities in system resilience and the capacity for future scaling.

Amid rising geopolitical, financial and climate pressures, the energy transition is being influenced by competing priorities. While momentum has slowed in some regions, political commitment remains active in others. In this context, a fact-based assessment is critical to tracking where transition efforts are delivering progress and where momentum could stall.

In 2025, the imperative to accelerate energy transition efforts is not just about meeting long-term climate targets – increasingly, it’s about managing a growing set of interconnected risks to national security, economic stability and social resilience.

The past year underscored the scale and complexity of this challenge. Notably, 2024 was the hottest year on record, testing energy systems under extreme conditions. Conflicts in Europe, the Middle East and Africa disrupted supply chains and heightened global uncertainty. Energy demand grew by 2.2% (the fastest pace in a decade), driven by climate shocks that increased cooling needs, electrification and the rapid expansion of artificial intelligence (AI). It’s projected that data centres alone will account for 10% of global power demand growth by 2030. Yet, global energy efficiency progress stagnated, with primary energy intensity improving by just 1%. Meanwhile, emissions climbed to a new high of 37.8 billion tonnes, according to the International Energy Agency’s Global Energy Review 2025 – underscoring the widening gap between ambition and delivery.

This highlights the urgent need to reduce emissions more aggressively and “bend the curve”. While the expansion of renewables is accelerating, increasing global demand ensures that fossil fuels remain deeply entrenched in energy systems. To address this, energy efficiency – offering both immediate economic, energy security and environmental benefits – must be prioritized in transition strategies.

Amid these disruptions, the global energy mix is shifting in new directions. Liquified natural gas (LNG) demand has surged in Asia and Europe, and nuclear power is regaining momentum. This is largely attributable to China’s rapid expansion as well as many countries’ strong interest in small modular reactors (SMRs). Digital infrastructure and the growing share of intermittent production are placing new pressures on grids. Clean energy investment surpassed $2 trillion in 2024, doubling from 2020 levels and supporting over 16 million jobs with technological innovations that are rapidly progressing in areas like energy storage and electromobility. For a growing number of businesses and governments, clean energy is no longer just a climate imperative – it is a driver of industrial opportunity and future competitiveness.

Electricity systems reached a new high of 49% clean energy share, reflecting strong progress in power sector decarbonization. Yet, the average clean energy share in the overall primary energy mix remains just 14.8%, underscoring slower progress in heating, transport and industry. At the same time, annual clean energy investment growth slowed to 11% (down from 24-29% in recent years), raising concerns about future momentum.

Meanwhile, monetary tightening, persistent inflation and a shift towards economic protectionism have increased the cost of capital, particularly in emerging markets. The World Trade Organization (WTO) expects global merchandise trade to contract by 0.2% in 2025, reversing earlier growth forecasts and reflecting the broader shift towards economic fragmentation and more localized supply chains. Countries are exerting tightened control over critical energy materials – such as lithium, cobalt and rare earths – in response to geopolitical uncertainty. Reinforcing these pressures, the International Monetary Fund (IMF) downgraded its global growth forecast, citing inflation, fiscal strain and geopolitical fragmentation as key reasons. Financing costs in emerging economies remain up to seven times higher than in advanced markets, exacerbating a $2.2 trillion annual investment gap for clean energy.

Amid state-armed conflict, extreme weather events and geoeconomic confrontation – highlighted as top global risks in the World Economic Forum’s Global Risks Report 2025 20th Edition – energy security and industrial competitiveness have become central national priorities. Countries are increasingly focused on securing and localizing clean energy supply chains, safeguarding critical resources and harnessing energy transition efforts as strategic advantages in the face of growing geopolitical and trade-related challenges. Concurrently, the escalating nexus of extreme weather, geopolitical strategy and transition goals is driving a rethinking of energy security frameworks – not just at the national level, but also within sub-national systems. This shifting landscape is transforming how nations approach resilience, reliability and regional cooperation for future energy systems.

The transition remains multi-speed and uneven. Advanced economies, led by the Nordics, continued to top the ETI rankings, supported by diversified energy systems and institutional strength – but faced challenges with grid congestion, high prices and delivery bottlenecks. Notably, Nigeria made strong progress, rising from 109th place in 2016 to 61st in 2025 – driven by improvements in financial investments and infrastructure. Latvia and the United Arab Emirates posted some of the fastest score gains, demonstrating the power of clean energy adoption and targeted reforms. China reached fifth globally in transition readiness, largely due to its innovation ecosystem and recent political commitments, including an economy-wide emissions reduction plan. Japan combined world-leading energy access and strong innovation with renewed momentum through updated emissions targets. The US led in energy security, while India advanced in energy efficiency and investment capacity.

While 77 of 118 countries improved their scores in 2025, the share of countries advancing across all three energy dimensions was only 28%, highlighting that the majority still progressed unevenly. These disparities were mirrored in global capital flows: over 80% of energy demand growth came from emerging and developing economies, but more than 90% of clean energy investment since 2021 was seen in advanced economies and China, revealing a misalignment between capital flows and future demand.

As countries prepare for a more fragmented and volatile energy future, three system-level priorities are emerging:

1. Energy security redefined: Beyond affordability and supply diversity, security now includes grid resilience, critical minerals access, energy efficiency and digital infrastructure vulnerability.

2. Investment where it matters most: Addressing the capital imbalance is vital. Without stronger financial mechanisms in emerging markets supported by effective policy environments, national and global transition goals will fall out of reach.

3. Infrastructure as a limiting factor: Constraints have shifted from technology to delivery. Grid capacity, permitting processes and workforce readiness are now some of the most decisive levers of progress.

Looking ahead, success will depend not just on accelerating ambition but aligning it with delivery capability. The 2025 ETI highlights that momentum is rebuilding – but, to ensure a sustainable transition, plans must translate into tangible projects, and commitments into capital. That will require stable regulation, credible pipelines and supportive ecosystems that can scale solutions where they are needed most.

There is no single path forward. Countries have different starting points, capacities and constraints. While global coordination sets direction, effective execution will depend on adaptive, context-specific approaches. Aligning national transitions with shared global goals relies on grounded strategies that reflect local realities, because, in an increasingly volatile world, resilience and adaptability will determine success. Cooperation across national borders remains vital to energy security, equity and sustainability.