Global fossil fuel emissions to fall in 2026

 From Carbon Brief

Global fossil-fuel emissions are set to fall by around 0.5% in 2026 amid the fallout from the Hormuz crisis, according to Carbon Brief analysis.

The US-Iran war has severely disrupted trade through the strait of Hormuz, causing a spike in oil and gas prices that continues to ripple around the global economy.

Each month of disruption – and each new flashpoint, such as in Yemen – is increasing the incentive to switch to alternatives.

Those alternatives include coal, with the latest forecasts pointing to a 1.2% rise in coal demand this year – apparently supporting media claims of a “return to coal” in the wake of the crisis.

Yet Carbon Brief’s analysis shows the rise in emissions associated with this increased coal use, much of which is unrelated to Hormuz, is set to be more than offset by declines for oil and gas.

The estimated overall impact on carbon dioxide (CO2) emissions from fossil fuels in 2026 is shown in the figure below and amounts to a reduction of around 0.5% from 2025 levels.

(Fossil fuels account for two-thirds of global greenhouse gas emissions.)

The emissions estimates for each fossil fuel are based on the latest forecasts from the International Energy Agency (IEA) for coal, oil and gas, in light of the ongoing global energy crisis.

For example, the agency initially estimated that global coal demand would decline this year. In its 2025 coal report, published in mid-December, it said that declining coal demand in China would outweigh the impact of pro-coal policies under US president Donald Trump.

In contrast, the latest update, published in September 2026, said that global coal demand would rise by 1.2% in 2026, instead of the small decline that had been expected.

The report highlighted the boost to coal demand from higher gas prices in the wake of Hormuz. However, there are limits to this, because few countries can switch from gas to coal at large scale.

The IEA’s latest report also noted the role of a strong El Niño, which is pushing up the need for cooling and depressing hydropower output in key markets. Other short-term factors are also affecting coal demand this year, including a rising amount of “wasted” wind and solar in China.

For gas, the IEA did not initially update its previous forecast that global gas demand would rise by 2.0% in 2026, which had been published in January of this year.

Its most recent forecast – published in July – already pointed to a 0.6% drop in demand in 2026. Since then, pressure on gas demand from high prices has only grown stronger.

For oil, there has been an even more dramatic shift in forecasts since the start of the year.

In its January 2026 oil market report, the IEA forecast a rise in demand in 2026 of 930,000 barrels per day (bpd). As shown in the figure below, this has been steadily revised downwards over the course of the year, as the Hormuz crisis was first ignited – and then extended.

By September, the IEA was forecasting a 2,500,000bpd drop in oil demand in 2026, equivalent to a reduction of 2.4% from 2025 levels.

(A 15 September research note from Morgan Stanley, not available online, found a “consensus” forecast of a 2,415,000bpd drop in demand in 2026.)

 

While there are many short-term factors at play in the shifting forecasts for 2026, it is clear that the latest energy crisis will also affect fossil-fuel demand in the next year and beyond.

For example, whereas the IEA initially forecast that oil demand would rebound in 2027 to well above 2025 levels, it is now expecting use of the fuel to be effectively flat for two years.

This puts a question mark over its previous expectation – published in October last year – that global oil demand would not peak until as late as 2030.

“For every month the conflict lasts, the probability of permanent [oil] demand destruction increases,” wrote Sverre Alvik, vice president at consultancy DNV in a late August analysis.

As fuel prices have surged, electric vehicles (EVs) have captured record shares of major car markets, from Australia and China through to Europe, Indonesia and Thailand.

In July, EV sales nearly doubled year-on-year in “new markets”, noted Alvik, pointing to countries outside China, Europe and North America.

The IEA says the 2027 outlooks for coal and gas are interdependent, with coal demand potentially increasing again if gas prices remain elevated – or dropping back if gas prices ease.

At the same time, governments in countries that had planned to rely on imports of liquefied natural gas (LNG) have been signalling shifts towards favouring domestic clean energy instead – or continuing to use coal for longer.

The current crisis, therefore, has the potential to not only lower fossil-fuel use and emissions in the short term, but also on a more lasting basis.

[Read more from Carbon Brief here]

 

Am I being too optimistic by believing that emissions have peaked?  China's emissions have flattened, and if they sort out their curtailment problem ("wasted" wind and solar) then their emissions will start falling.  The Iran war has created a massive incentive for individuals, companies and governments to switch to renewables.  The US has shown that it is unable to maintain open seas for oil transportation, which means that this disruption is likely to continue, even if there are temporary fluctuations in oil and gas prices, as rumours of peace talk rise and vanish.  At the same time, battery, solar and EV costs will continue to fall, increasing their appeal.  You have to buy oil every day, but cars last 15 years, batteries now last 20+, and solar panels 30+.  A once-off cost gives you free travel and electricity for decades. And, outside the US and China, EVs now have the same "sticker price" as petrol/diesel cars.

The switch will continue even after the Trump administration is history.

China's emissions fall because of declining oil use

 From Gavin Mooney

China’s emissions fell again in Q2, but for the first time it was falling oil use that drove them down.

That matters because until now China’s emissions story has tended to be a coal story.

According to Lauri Myllyvirta’s latest analysis for Carbon Brief, China’s CO₂ emissions fell 1% year-on-year in Q2 2026. When emissions have fallen previously, lower coal consumption was the main driver. This time, it was oil doing the work.

Oil use fell 9% overall and 16% in transport amid the Strait of Hormuz crisis.

But this is also not just a temporary shock. Transport activity was broadly stable or still growing, which means the fall in fuel use was enabled by structural changes already underway.

A few things are happening at once:

✅ EVs are now displacing enough oil to matter at national scale
✅ Existing EVs were used more, with charging volumes up 60% in Q2
✅ Rail, metro systems and electric trucks are reducing demand for petrol and diesel

The less rosy part is coal.

Coal use in the power sector still rose 2.4%, partly because more wind and solar output was curtailed due to grid and market constraints. Recent five-year plan documents include measures to improve clean-power utilisation, but this remains one of the key bottlenecks.

So this is not yet a clean “China’s emissions have peaked” moment.

It is more nuanced than that. China’s emissions have really been on a plateau since early 2024, with small moves up and down.

What is significant is that the pressure is now coming from more than one direction.

Until recently, the key question was whether clean electricity could reduce coal use fast enough to bring emissions down. Now oil demand is starting to pull in the same direction.

If coal and oil eventually start falling together, China’s emissions plateau could become a much clearer decline.

Read the Carbon Brief article here.

The end of oil

From The Conversation

US President Donald Trump is a longtime climate denier and oil industry ally, who sums up his own energy policy as “drill, baby, drill”. Yet he is doing more than almost anyone to speed up the global shift from fossil fuels to clean energy and electric vehicles (EVs).

After the US and Israel struck Iran in late February, Tehran closed the Strait of Hormuz and triggered the largest disruption of oil supply in history.

Ironically for Trump and his oil industry donors, this crisis may be an irreversible tipping point for clean energy. For years, fossil fuel advocates spruiked oil, gas and coal as “reliable” energy. That narrative has been reversed. Fossil fuels have become expensive and unreliable, while renewables are cheap, reliable and secure.

For the first time ever, more than 50 nations will gather next week in Colombia to hash out how to wind down and end their dependence on coal, oil and gas. The history-making conference was planned before the Iran war. But this year’s energy crisis has greatly raised the stakes.

The oil crisis is real

Iran’s closure of the narrow Strait of Hormuz stopped oil tankers reaching their destinations. But that wasn’t all. More than 60 gas and oil sites have been damaged in the conflict so far. Even if a durable ceasefire is reached, these impacts will reverberate for months and years to come.

Around 80% of the trapped crude oil was destined for the Asia-Pacific. Faced with dwindling supply, the region’s governments are implementing emergency measures such as sending workers home, banning government travel, rationing fuel and cutting school hours.

The problem is especially bad in the Pacific. Many island nations use diesel for power generation. In response, leaders declared a regional emergency.

Fuel import bills were already a major burden for Pacific nations, leading to efforts to switch to local renewables. Fuel bills could rise by A$933 million in Fiji (nearly three times the healthcare budget).

Scrambling for energy

When energy supplies are disrupted, leaders have three options: find alternate supplies, reduce use or switch to alternatives. In the very short term, countries aim to shore up supply, just as Australian Prime Minister Anthony Albanese did last week in Malaysia.

Countries have also moved to reduce use. This can have lasting effects. During the Middle East oil shocks of the 1970s, oil prices tripled and then doubled again. Authorities responded by improving energy productivity to do more with less. The world’s final oil demand per capita peaked in 1979 and has never recovered.

But the real difference from half a century ago is that fossil fuel alternatives are ready for prime time. Since the 1970s, the price of solar panels has fallen 99.9%, while the cost of wind has fallen 91% since 1984. Battery prices have fallen 99% since 1991.

This means it’s now viable for many nations to switch to these alternatives.

The European Union will accelerate electrification, after its fossil fuel bill increased more than $36 billion since February. France has doubled state aid to help households switch to EVs and electrify home heating. Import-dependent South Korea gets 70% of its crude oil through the Strait of Hormuz. It now plans to double renewables capacity within four years.

Electric vehicles at the tipping point?

This year’s oil shock shows signs of creating an unplanned social tipping point – a threshold for self-propelling change beyond which systems shift from one state to another. Climate scientists warn of climate tipping points which amplify feedback and accelerate warming. But social scientists also point to positive tipping points – collective action that rapidly accelerates climate action.

The rush to EVs is a case in point. In Australia, petrol prices surged almost 50% in March, and diesel more than 70%. It’s no surprise new EV sales are at an all-time high, while secondhand EV sales more than doubled last month.

Australia’s 1.3 million hybrid and battery electric vehicles avoid almost 15 million litres of petrol and diesel use every week.

The rush to electric transport is global. Most new Chinese cars are powered by batteries, not oil. Battery electric vehicles outsold petrol cars for the first time in Europe in January.

A conference to quit fossil fuels

The routine burning of coal, oil and gas is the primary driver of the climate crisis. The world’s highest court last year made clear nations have obligations to stop burning fossil fuels.

But fossil fuels have barely been mentioned in 30 years of global climate negotiations, due in part to blocking efforts by big fossil fuel exporters and lobbyists.

Frustrated by slow progress, a coalition of nations has bypassed global climate talks to discuss how to actually phase out fossil fuels.

The first of these summits will take place next week. More than 50 nations will gather in Santa Marta, Colombia, to discuss a potential standalone treaty to manage fossil-fuel phaseout while protecting workers and financial systems.

Colombian Environment Minister Irene Vélez Torres says it comes at the “best possible moment”, as the oil crisis focuses global attention on fossil fuel dependency.

If next week’s summit produces real momentum to wean off fossil fuels amid the energy crisis, we might look back at it as a social tipping point where early adopters move in earnest – and make it easier for the rest of the world to follow.

China's green tech exports up 70%

From Jasmin Smajic 

China's exports for the solar, EV, and battery industries reached a record high of $21.9 billion in March 2026, up 70% year-on-year.

Trump's stupid attack on Iran has accelerated the shift to green tech.  And I suspect this is only the beginning.

Renewables met 100% of global demand in 2025

 From Renew Economy

Record amounts of new solar and wind generation capacity met 99 per cent of global electricity demand growth in 2025, new data shows, as the rise and rise of big batteries helps transform solar into a “round-the-clock resource” – with Australia leading the charge.

According to the Global Electricity Review 2026 from energy think tank Ember, renewable power generation increased by 887 terawatt-hours (TWh) in 2025, outpacing electricity demand growth of 849 TWh for the year.

Solar – as noted above – was the big star of the year, with new PV generation meeting 75 per cent of the net increase in global power demand, growing by a record 636 TWh in 2025 to reach 2,778 TWh in 2025, a 30 per cent jump on 2024.

The increase in global solar capacity [output] was 18 times as large as that of gas (+36 TWh), which was the only fossil power source that grew in 2025, Ember says.

A separate report, the International Energy Agency’s (IEA) Global Energy Review says the global solar juggernaut contributed the largest structural increase ever recorded in a single year for any electricity generation technology in 2025, and helped renewables outpace coal growth for the first time. 

In the context of the current Middle East conflict, Ember notes that the solar generation added in 2025 would be sufficient to displace gas-fired electricity equivalent to all LNG exports through the Strait of Hormuz in the same year, estimated at 550 TWh. 

Global solar generating capacity [output] has been doubling roughly every three years, Ember says, rising from 1,333 TWh in 2022 and overtaking wind power for the first time globally in 2025. Both solar and wind are expected to overtake nuclear in 2026.

Wind energy, too, had a bumper year according to a separate Ember report, which shows that the global industry installed a record-smashing 165 gigawatts (GW) – or 205 TWh – in 2025, marking the highest ever level of new installations for the wind power industry.

Australia followed the global wind trend, charting 43 per cent year-on-year growth with 1,200 new wind projects coming online in 2025, compared to 835 in 2024 – bringing the total number of wind projects by the end of 2025 to 13,515. 

“Australia recorded a significant increase in wind generation … due to stronger wind conditions and major new wind farms coming online, such as the 412 MW Goyder South wind farm and the 923 MW MacIntyre Wind Farm, Australia’s largest-ever wind farm project,” the report says. 

But Ember notes that fewer projects achieving final investment decision and approval for the coming years, due to planning delays, inflation and community opposition, points to a drop in the future pipeline.

In combination, wind and solar now contribute more than half of all global renewable generation and, combined with nuclear (8.9%) and hydro, low-carbon sources reached 42.6 per cent of total electricity generation in 2025, up 9.1 percentage points from 33.5% in 2015. 

On the other side of the coin, the share of fossil generation fell to 57.4 per cent, down from 66.5 per cent in 2015. This was the first year since 2020 without an increase in electricity generation from fossil fuels and only the fifth year without a rise this century.

For storage, 2025 was also a landmark year, in which battery economics reached a turning point, with battery pack prices for stationary storage falling to a record low of $US70/kWh – down 45 per cent on 2024 – allowing dispatchable solar with batteries to be delivered for around $76/MWh.

“This makes it cheaper and faster to build than a new gas power plant, particularly in countries reliant on expensive LNG imports,” the report says. 

Globally, battery storage capacity additions jumped by 46 per cent from 2024 to an estimated 247 GWh, according to Ember – enough to shift around 14 per cent of global solar generation from daytime to other hours.

According to the IEA, battery storage was the fastest-growing power sector technology in 2025, with the roughly 110 GW of new capacity added over the course of the year beating the largest-ever annual capacity additions for natural gas.

“Battery storage is the fastest growing power technology today,” the IEA says.

“Installed capacity is now eleven times higher than in 2021. Lithium‑iron phosphate (LFP) batteries now account for around 90% of deployments; while less energy‑dense than rival chemistries commonly used in EVs, LFP batteries are typically cheaper and better suited to more frequent cycling. Just five years ago, the market share of LFP batteries in deployments was well below 50%.”

Ember marks 2025 as the year that batteries are “finally moving into the mainstream” to help shift solar power beyond daylight hours and unlock the next phase of solar expansion.

“Batteries have outgrown their initial niche role as a grid stability service and are now core infrastructure designed to store excess daytime electricity and release it in the evening and at night,” the Ember report says.

In this regard, Ember says Australia is leading the world, as one of two countries alongside Chile that could shift more than 50% of the new solar capacity added in 2025 with new battery capacity, transforming PV generation from a daytime solution to “a nearly round-the-clock resource” and the most affordable pathway to meet rapidly rising electricity demand.

“Australia and Chile stand out for adding relatively small amounts of battery capacity in absolute terms, 9 GWh and 4 GWh respectively, but large enough relative to their solar growth to make a material difference,” the report says. 

“Australia shows how batteries can quickly reshape power markets once deployed at scale. In Q4-2025, during the high-value evening peak hours (18:00-20:00) in the National Electricity Market, batteries set prices 36% of the time – doubling from 18% in Q4-2024, displacing gas and hydro as price setters.

So much for renewables leading to higher prices!

“This led to significantly lower price volatility compared with Q4-2024, with average spot prices of around $100 per MWh during 18:00-20:00, less than half of the Q4-2024 average spot prices during these hours. This helped bring overall prices lower, with wholesale prices averaging $50/MWh, a $39/MWh (-44%) reduction from Q4 2024.

These dynamics, says Ember, show batteries are already delivering tangible system benefits by reducing reliance on expensive fossil generation and stabilising prices at the most critical times of day.

“We have firmly entered the era of clean growth,” says Ember managing director Aditya Lolla.

“Clean energy is rapidly redefining the foundation of energy security in a volatile world. It is already helping countries reduce exposure to fossil fuel imports and costs while meeting rising electricity demand.”

 It's clear that emissions from electricity (~30% of total emissions) have peaked.  It's now obvious to everybody, except those who get paid not to see the truth, that reliance on oil and gas is an economic and a strategic risk.  EV sales have risen 50%, as consumers have seen the light, but it must also be self-evident to all in government that it would be far less risky to permanently uncouple economies from oil.  So it is likely that emissions from land transport (~18% of emissions) will peak soon, as EV sales explode.  And governments will force their electricity producers to install more solar and batteries and less gas, to reduce reliance on LNG shipped through the straits of Hormuz.

Also, the oil crisis will most likely lead to a recession, because of a combination of physical constraints on output (for example, Europe has just 6 weeks of aviation fuel left), on confidence (consumer and business) and on incomes (a jump in inflation.)  I lived through the 1973 and 1979 oil crises, both of which led to deep recessions and surging inflation, and this crisis is bigger than those two. In fact, the oil supply shock is bigger than those two combined.  And the consequent fall in oil demand will only be partially replaced as economies recover.  

Emissions have peaked.  Unambiguously good news.

Solar and wind replacing the Hormuz gap

 From This is Not Cool

This seems like Good news.

Center for Research on Energy and Clean Air:

Global power generation from fossil fuels fell in the first month since the start of the Hormuz closure, with the fall in gas-fired generation offset by large increases in solar and wind power, rather than coal.

The power generation dataset prepared for this analysis covers countries that disclose near-real-time data. The dataset covers 87% of global coal power generation and over 60% of gas-fired power generation.

Total power generation from fossil fuels in countries with near-real-time data fell 1% year-on-year, with coal-fired generation flat and gas-fired generation falling 4%. The dataset covers the world’s largest power markets: China, the U.S., the EU, and India, among others.

Seaborne coal transport volumes fell 3%, to the lowest levels since 2021. The data contradicts widespread expectations that coal power generation would rise in response to the crisis.

This is the first oil crisis where we *have* alternatives.  We can replace imported gas with wind, solar and storage.  We can replace petrol and diesel vehicles with EVs.  What's more, *everybody* knows it.  Governments, companies, individuals.  

Global emissions have peaked.  Oil demand has plunged, and only some of that demand is coming back, and then only in the short term.  How ironic that this is thanks to Trump.

So yes, emissions will rise again, but the next peak will be lower than this one.

(Caveat:  So-called "AI" data centres.)

If only we'd switched to EVs faster

 From Ray Wills

World 1.5MBPD oil displaced by EVs in 2024 China in 2025 Oil market not about the 100 mbpd we use, but the 1-2 mbpd YOY change Oil markets break on variations > 1-2MBPD [Highly inelastic demand] China's vehicle fleet electrification has just removed 250ML/day of China's demand - or >1.5MBPD

From The Driven

#Iran war highlights how #oil has become the Achilles Heel of the global #economy. EVs have already avoided equivalent of 70 pct of Iran's exports, and could do more.

China's oil demand to peak in next 5 years

 From Reuters

China's oil demand is forecast to plateau between the years 2025 and 2030, a research group linked to state oil major CNPC said on Thursday, as the rise of electric vehicles slashes demand for gasoline and diesel.

Most of China's incremental demand for oil this year came from jet fuel and petrochemicals, said Haibo Wang, director of oil market research at the CNPC Economics & Technology Research Institute.

Apparent consumption of oil is expected to reach 760 million tons in 2025, up 0.9% on the year, he added, but demand is set to stabilise next year and stay above 700 million tons until 2030. 

Last year the research unit forecast that oil demand could reach 770 million tons in 2025, before gradually falling to 240 million by 2060.

In September, top refiner Sinopec, which is also state-owned, said it expected total oil demand to peak in 2027.

Natural gas demand will peak later, between 2035 to 2045 at 620 billion to 650 billion cubic meters, the CNPC research group added.

It also raised its forecast for oil demand used to make chemicals and new materials to a peak of 290 million tons in 2050, up 57% from this year.

Even though demand for oil for road transport is now falling fast in China, demand for oil for chemicals and plastics will continue to rise.  

(Source)

China's consumption of transport fuels falls 4%

 From a skeet by Lauri Myllyvirta

Quarterly results of China's and the world's largest oil refiner Sinopec: China's consumption of transport fuels (gasoline, diesel and kerosene) fell 4% year-on-year in Jan-Sep, due to the impact of "alternative energy" i.e. EVs, speeding up from 3.6% drop in H1.

Demand for main petrochemicals [however], measured in ethylene equivalent, grew 8% - surging plastics and chemical production continues, with lots of new capacity coming online at the end of the five-year plan. Import substitution plays a part but cannot account for most of the growth.

I've been puzzling over the reported growth in transport fuel production in recent months, which doesn't seem to be accounted for by domestic demand or net exports. The Sinopec data suggests that it's inventory buildup (or  under-reported exports?).

Source: paper.cnstock.com/html/2025-10...

China's emissions have either peaked already, or will soon do so.  In which case, world emissions will also peak.  The decline initially will be small, but it will accelerate because of cheap EVs, solar and batteries.   Our task now is to steepen that curve and to accelerate the replacement of fossil fuels.

Source: Our world in data

 

Why emerging markets choose EVs

An interesting video by Energi Media

Developing countries are buying EVs because they're cheap, in essence,  2- and 3-wheelers, buses and now EVs have reduced oil demand by 2 million barrels a day from what it would have been.    Petrol and diesel demand is expected to peak in absolute terms in a couple of years, and has already peaked in China.  That will not mean peak oil demand because of air travel and sea transport.  These are sectors where will need to do more to reduce emissions.

Sodium-ion even cheaper than I thought

I wrote a piece a month ago about CATL's new sodium-ion battery.  The video I link to provided more information, suggesting costs are even lower than I said.

The cost at cell level will be $19/kWh vs lithium-ion phosphate (LFP) of $55-$60/kWh.  CATL expects $10/kWh in a couple of years.  $45/kWh at pack level, less than half the cost of LFP.   Production can be carried out on existing assembly lines, so they don't have to rebuild the entire factory.  Any factory making LFP could pivot to sodium-ion at minimal cost and time.   

They will retain 85% after 3.6 million miles.  I said 80% in my earlier piece; so this is even better, meaning that after 50 years, 75% of the battery capacity will remain.  Their life will be 3-6 times longer than the best LFP packs.  Energy density has dramatically improved.  A year ago it was 120-140 Wh/kg, too heavy for EVs. The new energy density is 175 Wh/kg, better than BYD's current blade battery (160 Wh/kg).  They can be charged and used from -40 Celsius to +70 C.  And they use abundant materials: sodium, aluminium and carbon.  They are maintenance free.  They can be safely transported at zero charge, unlike lithium batteries.  CATL has also developed a pack made up of both sodium-ion and lithium-ion cells, combining the best qualities of both. 

Years ago, the rule of thumb was that if battery pack costs fell to $100/kWh, that would make EVs cost the same up-front as ICEVs (petrol vehicles).   (EVs are already much cheaper to run)  We have shot way past that point.  The introduction of sodium-ion batteries means that ICEVs will no longer be cost-effective, and production will cease.  

But this will also transform the grid.  The cost of storage has more than halved, and will halve again.   Solar is already the cheapest electricity for everywhere except high latitudes, and now it can be combined with enough dirt-cheap storage to provide base-load power.   That probably means 8 hours of storage, but storage will be so cheap that even 12 hours will be perfectly feasible and economic.  High latitudes will still need long-term storage, but when your EV dies, the batteries will still have another 50 years plus of life in them, and then they can be shipped to high latitudes to provide completely free long-term storage.

This spells the end of the fossil fuel economy.   Except for air transport and cement making, everything we now do with coal, oil or gas will be doable with cheap electricity from solar plus sodium-ion storage.

Even in the USA, even with 25% tariffs on imported batteries, the plunge in storage costs means that the EV and storage revolutions will continue.