The report finds energy demand in emerging and developing economies (EMDEs) could rise by more than 60% by 2060, adding the equivalent of another China to global primary energy demand. Over the same period, it predicts that demand in advanced economies and China is expected to remain broadly flat as electrification and energy efficiency improvements moderate growth in final energy consumption.

According to the study, meeting rising energy demand while maintaining energy security, resilience and affordability will require a more nuanced approach to decarbonisation than has characterised much of the energy transition debate over the past decade.

‘The thinking and policies that have sought to shape the energy transition over the last decade have collided with the realities of economic development, growing energy demand, geopolitics and the pace of technological progress,’ said Daniel Yergin, Vice Chairman, S&P Global.

‘The fundamental fact is that the largest source of long-term energy demand growth will come from EMDEs, where energy needs are driven by economic development, industrialisation, urbanisation and rising incomes.’

The study concludes that limiting global temperature rise to 1.5°C is not achievable under any plausible pathway and that reaching global net zero emissions before the end of the century is unlikely. While some advanced economies may achieve, or come close to achieving, carbon neutrality by 2060, most EMDEs are not expected to do so until much later in the century.

However, keeping warming to 2°C by the end of the century remains possible under the report’s most aggressive decarbonisation scenario.

Under this ‘Emissions Reduction Pathway’, global solar and wind capacity would increase eightfold by 2060, including an 18-fold increase across EMDEs, providing 73% of the world’s electricity. Grid battery capacity would increase 25-fold over the same period, while total greenhouse gas emissions would fall by 65%, assuming corresponding reductions in non-energy emissions.

By contrast, the study’s ‘Current Realities Pathway’, which it describes as a more likely outcome under today’s policy environment, sees emissions fall by only 17% by 2060, resulting in around 2.8°C of warming by the end of the century.

A third scenario, the ‘Diverging Priorities Pathway’, assumes advanced economies continue to prioritise emissions reductions while developing economies place greater emphasis on economic growth, energy affordability and energy security. Under that scenario, global temperatures would rise by around 2.5°C by the end of the century.

Despite the potential to limit warming to 2°C, the report argues that significant technical and financial barriers remain in the way of achieving it.

‘Electrification based on renewable energy sources is key to emissions reduction, and the rate of growth will be substantial,’ said Atul Arya, Senior Vice President and Chief Energy Strategist at S&P Global Energy.

‘Nevertheless, there are practical limits to how much power systems can expand, decarbonise and remain reliable at the required pace, at affordable cost and within the limits of available finance.’

The study estimates that around $50tn in global investment would be needed by 2060 for power generation, storage, transmission and distribution infrastructure. It notes that integration costs increase significantly once variable renewable generation exceeds around 50–60% of electricity supply.

The report also highlights challenges in electrifying sectors such as heavy industry, aviation, shipping and freight transport. Medium- and heavy-duty transport remains particularly difficult to electrify, with electricity accounting for less than 30% of the sector’s energy use by 2060 across all scenarios.

As a result, S&P Global expects a prolonged period in which multiple energy sources operate alongside one another. Fossil fuels remain part of the energy mix in every pathway, even as their overall share declines.

Under the 2°C pathway, the study estimates that more than $11tn of upstream investment in oil and gas would still be needed through to 2060. Under the Current Realities Pathway, where oil demand falls by only 7% and natural gas demand rises by 35%, upstream investment requirements increase to nearly $14tn.

The study argues that countries’ energy transitions will be shaped by their own resource endowments, infrastructure and economic priorities, rather than by a single global model.

According to the report, energy-related CO₂ emissions outcomes vary widely between countries, ranging from near-total reductions to increases of more than 90% by 2060. In some cases, energy security and affordability may favour faster deployment of renewables and electrification, while resource-rich countries may place greater emphasis on domestic fossil fuel production.

‘The energy transition will be increasingly defined by how the world meets large volumes of new demand while also reducing emissions, strengthening security and preserving affordability,’ said Nick Lowes, Vice President, Consulting, S&P Global Energy.

‘It will be multidimensional, regionally differentiated and multi-speed.’