The publication below is a summary of the Statistical Review of World Energy 2026, the 75th edition of the Energy Institute (EI). The report was institutionally produced by the Energy Institute, in partnership with Ember and in collaboration with KPMG and Kearney, while the data compilation was carried out by Wattage. EI presents the publication as a global, impartial and traceable dataset covering energy production, consumption, trade, prices and emissions by energy source. The accompanying KPMG analytical report, Divergent and disorderly: Mapping global energy trends in an increasingly volatile world, which interprets the data from the Statistical Review, was also used. Its listed author team comprises Wafa Jafri, Simon Virley, Chris Young, Alex Choi, Javier Mundo, Sammy Ahmed and Safeera Loonat.
Core finding: the energy transition is not a linear replacement of fossil fuels
The Statistical Review of World Energy 2026 presents a global energy system that is expanding, becoming more electrified and diverging sharply across regions. Its central message is not that the transition has stopped. Rather, the transition is proceeding unevenly. Renewable power, solar generation and battery storage are expanding at unprecedented rates, but this growth is not yet sufficient to offset rising overall energy demand and the continuing use of coal, oil and natural gas.
In 2025, global total energy supply reached a record level of around 600 exajoules, increasing by 1.7% from 2024. For the second consecutive year, all major sources of energy reached all-time highs. This is a defining feature of the current period: the world is not simply replacing one dominant energy system with another. Instead, it is adding low-carbon capacity on top of a still-growing fossil-fuel base.
KPMG describes this process as a divergent and disorderly transition. Countries respond differently to the same price shocks, climate risks and geopolitical pressures. In some jurisdictions, energy-security concerns accelerate investment in renewables, electrification and grids. In others, they lead to greater reliance on domestic coal, oil, gas or strategic reserves. The global system is therefore not following a single coordinated pathway, but a set of nationally determined approaches to security, affordability and industrial competitiveness.
Energy security and the rebalancing of the energy trilemma
The report places energy security at the centre of its analysis. Successive crises — from the oil shocks of the 1970s through the global financial crisis, the pandemic, the war in Ukraine and new Middle East tensions — have reinforced the strategic character of energy. It is increasingly treated not only as a commodity or production input, but as an essential component of economic and national security.
Governments must balance three objectives that frequently conflict: security of supply, affordability and sustainability. A rapid move away from coal may reduce emissions but increase dependence on imported gas. Large investments in grids, storage and clean technologies can improve resilience but may raise short-term consumer costs. Expanded domestic oil and gas production can reduce import exposure but complicate the path towards climate targets.
KPMG identifies three broad response patterns. The first comprises countries that use crises to accelerate renewables, grids and electrification. The second includes economies that give priority to growth and meeting rapidly rising power demand. The third follows a resilience-focused approach, combining renewables with domestic fossil-fuel output, strategic reserves and import diversification.
This fragmentation has direct consequences for companies. Energy strategies built on the assumption of an integrated global market are becoming less reliable. Energy prices, regulation, critical-mineral access, supply-chain risks and exposure to geopolitical disruption increasingly differ between Europe, North America, China, India, the Middle East and Africa.
Oil: the centre of supply is shifting towards the Americas
One of the report’s most important structural findings concerns the geography of global oil supply. The Middle East remains a critical producer and transport hub, but it no longer has the same relative dominance that it held during earlier oil crises. In 1974, Middle Eastern producers accounted for 37.4% of global oil production. By 2025, this share had fallen to around 30.9%, mainly because of expanding output in the United States, Brazil and Guyana.
Combined oil production in North, Central and South America is now around 20.8% higher than production in the Middle East. This does not eliminate the importance of the Gulf for oil prices, shipping routes and global trade. However, it reduces the extent to which the market depends on one geographical centre of supply. The United States, Brazil and Guyana are expected to remain important drivers of non-OPEC+ production growth.
China continues to shape global oil demand and trade. According to KPMG, it remains the world’s second-largest oil consumer after the United States and the largest individual importer of crude oil and petroleum products. Its inventory management can affect short-term demand for seaborne crude and, consequently, price formation in international markets.
Natural gas and LNG: from market optimisation to supply security
Natural gas is increasingly operating as a globally traded commodity rather than a primarily regional fuel delivered through pipelines. Global gas consumption reached a record 150.7 exajoules in 2025, with growth across most regions. Asia remains the main centre of global gas and LNG demand.
The United States has strengthened its position as the leading LNG exporter and accounted for more than one quarter of globally traded LNG volumes, according to KPMG. Europe has undergone the most significant recent structural change. Pipeline imports from non-European countries declined from 232.7 bcm in 2021 to 96.4 bcm in 2025, while LNG imports increased by 61.9%. Europe has therefore replaced a large share of its previous dependence on Russian pipeline gas with broader LNG dependence, especially on supply from the United States, Norway and the Middle East.
This change increases flexibility but does not remove risk. LNG allows cargoes to be redirected between continents, but it also exposes buyers to global competition, terminal capacity constraints, maritime disruption and volatile spot prices. Wealthier markets with stronger infrastructure can absorb higher prices. More price-sensitive economies may reduce consumption or revert to coal when LNG becomes unaffordable. This creates diverging energy and emissions pathways among regions.
Electrification is the main driver of new energy demand
Electricity has become the central component of global energy-system transformation. In 2025, electricity demand grew by 3%, almost twice the rate of total energy supply. The increase reflects industrial development, transport electrification, space cooling, digitalisation, data centres, artificial intelligence, advanced manufacturing and the expansion of electricity access in developing economies.
China is the largest single driver of this trend. Its electricity generation increased by 488.4 TWh in 2025, exceeding the combined increase recorded in the rest of the world. China now accounts for around one third of global electricity generation. The significance of this trend is not simply quantitative: electrification of transport, industry and urban infrastructure is becoming a central part of China’s energy-security and industrial strategy.
In Europe and North America, electricity demand had remained broadly flat for more than a decade, as efficiency gains and deindustrialisation offset new uses of electricity. That pattern is changing. Data centres, artificial intelligence, semiconductor production, battery manufacturing, electric vehicles and other power-intensive industries are creating new demand. In Africa, growing power consumption is also linked to expanded electricity access and industrial development.
Solar power and battery storage are scaling rapidly
The strongest progress in the low-carbon transition is taking place in solar power and battery storage. Solar generation increased by more than 30% in 2025 and accounted for around 75.3% of global electricity-demand growth. Solar has become one of the fastest-scaling technologies in the global energy system.
Its expansion is driven by falling costs, modular deployment, relatively short construction periods and the ability to install capacity at utility scale as well as behind the meter. Behind-the-meter and off-grid solar capacity also increased by 27% in 2025.
China dominates new capacity additions. In 2025, Chinese installations represented 61.6% of global solar additions and 75.2% of global wind additions. Chinese manufacturers also play a major role across the entire solar value chain, from polysilicon and wafers to cells and modules. The global expansion of solar therefore remains closely linked to Chinese industrial supply chains.
Battery storage is the second major enabling technology. Global battery-storage capacity increased by 65.8% in 2025. Storage is no longer a marginal complement to renewable power. It is becoming essential infrastructure for integrating variable solar and wind output, managing peak demand and providing the flexibility increasingly required by electricity systems.
The transition, however, is technologically uneven. Clean hydrogen and carbon capture, utilisation and storage remain constrained by high capital costs, weak demand, incomplete infrastructure and continued reliance on policy support. KPMG notes that only around 6% of planned clean-hydrogen capacity has an identified offtaker, while operational clean-hydrogen capacity remains a small fraction of national 2030 targets.
Coal remains an energy-security and affordability resource
Despite the rapid growth of renewables, global coal demand increased by 0.7% in 2025 and remained close to 28% of global energy demand. Asia-Pacific accounted for 83.2% of global coal consumption, driven mainly by China and India.
It is important to distinguish between total coal demand and coal-fired power generation. Global coal-fired electricity generation declined between 2024 and 2025 in most regions, including China and India. North America, however, diverged temporarily from this trend: coal-fired generation rose by 13.1% in the United States and by almost 7% in Canada. KPMG attributes this to higher gas prices, delayed plant retirements and rising electricity demand.
Coal therefore remains a reserve and affordability resource in economies with domestic reserves or exposure to fuel-import disruption. Energy-security concerns can delay coal retirements in the short term. Over the longer term, coal remains exposed to competition from cheaper renewable capacity, gas in some markets, ageing infrastructure and growing environmental and health costs.
Critical minerals have become a strategic bottleneck
The energy transition is shifting part of geopolitical competition from oil and gas towards critical minerals. Lithium, cobalt, nickel, graphite, copper and rare-earth elements are essential for batteries, electric vehicles, power grids, renewable technologies, defence systems and digital infrastructure.
Raw-material production is concentrated but geographically distributed. Processing and refining are much more concentrated. China refines roughly 44% of copper, 78% of cobalt and 91% of rare-earth elements. It also produces 69.7% of rare-earth output and 74.6% of natural graphite, while the Democratic Republic of Congo accounts for 68.5% of global cobalt production.
The strategic issue is therefore not only access to mineral deposits. It is access to processing capacity, infrastructure, logistics, technology, finance and stable supply chains. For Europe and other advanced economies, electrification and clean-technology deployment need to be accompanied by industrial policy, recycling, supplier diversification and partnerships with mineral-producing countries.
Emissions continue to rise while energy efficiency remains insufficient
The most difficult finding is the widening gap between technology deployment and emissions outcomes. Energy-related emissions increased by 1.1% in 2025, reaching around 41 037 million tonnes of CO₂ equivalent. Renewable deployment is growing rapidly, but it has not yet fully offset rising energy demand and continued fossil-fuel use.
Regional patterns are diverging. The United States accounted for 44.3% of the annual increase in emissions in 2025, while China’s emissions growth slowed to 0.3%. This does not mean that China is no longer the world’s largest single emitter. It indicates that flat coal demand, lower gasoline and diesel consumption, electrification and structural changes are starting to affect the pace of emissions growth.
Global energy intensity improved by 2% in 2025 to 3.9 MJ/USD. This is an improvement compared with 2024, but it remains below the 4% annual improvement rate targeted for 2030. Faster progress in energy efficiency, electrification and renewable deployment will therefore be required to move closer to climate objectives.
Conclusion
The report depicts an energy transition that is genuine but uneven. Solar power, batteries and electrification are progressing rapidly. At the same time, oil, gas and coal remain central because of rising demand, energy-security concerns, industrial needs and major regional differences.
For governments, the main implication is that supply security and decarbonisation should not be treated as competing alternatives. A resilient energy system requires diversified supply, stronger electricity grids, storage, domestic low-carbon generation, energy efficiency and reduced dependence on single-source critical-material supply chains.
For businesses, KPMG emphasises the need for regional rather than uniform global energy strategies; for treating resilience as a financial and competitive priority; for mapping supply chains beyond direct suppliers; and for prioritising technologies with demonstrated commercial momentum.
