NEO 2025 Executive Summary

Investors and businesses navigating the energy transition face rising complexity and uncertainty against a backdrop of elevated policy risk and geopolitical tension. Yet key clean energy technologies continue to enjoy strong fundamentals, with favorable economics and rising technology maturity driving adoption in diverse geographies across the globe. At the same time, accelerated power demand growth from rising adoption of artificial intelligence presents both a challenge and an opportunity.

Strong fundamentals underpin growth in renewables and EVs

Oil and coal face decline, though the speed is uncertain

Oil demand in the report’s base-case ‘Economic Transition Scenario’ peaks in 2032 at 104 million barrels per day, with road fuel peaking a few years earlier. Demand ultimately drops to 88 million barrels per day by 2050 – a significant decline from today, but far from the drop required to get on track for net zero. Outside of road transport, oil consumption remains resilient, with a doubling of demand for aviation and strong growth in petrochemicals through 2050.

Coal demand in the Economic Transition Scenario falls rapidly as cost-competitive renewables and gas displace its use in the power sector. Natural gas is the only fuel that sees long-term growth. Global demand increases 25% from 2024 to 2050, reaching 5,449 billion cubic meters due to lower long-term fuel price expectations and higher electricity demand from data centers.

The base-case outlook contrasts sharply with the Net Zero Scenario from 2024, which sees gas demand dropping steeply in the near term and roughly halving by mid-century. There are thus highly divergent futures possible for natural gas, and its role in the energy transition will look very different depending on which kind of transition trajectory is in play in a given region.

Fossil-fuel demand by sector, Economic Transition Scenario

Source: BloombergNEF. Note: ‘NZS 2024’ is the Net Zero Scenario from NEO 2024. Megatons are metric and assume a 6,000kcal/kilogram energy content. ‘b.’ refers to buildings. We have revised upward historical oil demand in NEO 2025 compared to NEO 2024 scenarios, as we now account more accurately for oil use for non-energy purposes outside the petrochemical industry.