The IEA’s World Energy Outlook 2025: A Shift in Decarbonization Dynamics
On 12 November 2025, the International Energy Agency (IEA) unveiled its annual World Energy Outlook (WEO). One of the most talked-about scenarios presented is the Net Zero Emissions by 2050 Scenario (NZE Scenario), which outlines a clear path toward eliminating net carbon dioxide (CO2) emissions by 2050. This ambitious roadmap emphasizes a fundamental transformation in our energy systems.
Analyzing the Path to Net Zero
The IEA’s analysis isn’t just about numbers; it meticulously assesses technologies, policies, and practices that can deliver significant and cost-effective reductions in CO2 emissions. A variety of factors—including technical efficacy, operational performance, deployment speed, and economic viability—are critically examined. Each year, the elements of the NZE Scenario are updated based on the latest intelligence on energy technology performance and cost trends, illustrating the IEA’s commitment to adapt and evolve as the energy landscape changes.
Renewables at the Forefront
In the 2050 NZE Scenario, a striking forecast emerges: solar and wind energy are expected to account for a staggering 73% of global electricity generation. This prominence is complemented by hydroelectric and nuclear energy, each projected to contribute roughly 9%. Together, these four renewable sources encapsulate 91% of electricity supplied, signaling a decisive shift toward cleaner energy production.
The Diminishing Role of Carbon Capture, Utilization, and Storage
Interestingly, the IEA’s latest findings notably downplay the role of carbon capture, utilization, and storage (CCUS). Historically, CCUS was highlighted as a key strategy for decarbonization, particularly for hard-to-reduce emissions sectors. Yet, the 2025 WEO provides a different narrative. CCUS is now projected to contribute a mere 4.9% to total emissions reductions, with only 1.2% coming from power generation and 3.7% from industrial applications. This stark reduction raises questions about the future role of CCUS in our path to a net-zero future.
Economic Dynamics Favoring Renewables Over CCUS
The shift towards renewable energy also reflects the IEA’s assessment that the economics of CCUS are becoming increasingly unfavorable compared to rapidly falling costs for renewable technologies. In 2025, global installed renewable energy capacity surged by an estimated 793 gigawatts (GW), with China leading the charge. Chinese entities installed around 342 GW of solar capacity in just 2025, demonstrating how large-scale renewable energy initiatives can be executed swiftly and at low costs.
Contrast this with Pakistan, where decentralized solar installations have proliferated, leading to a notable reduction in grid-based power demand. The rapid advancements in these renewable technologies suggest that they can mitigate emissions effectively and affordably, which is pivotal for the NZE Scenario calculations.
Policy Support and Economic Viability of CCUS
Proponents of CCUS affirm that consistent policy frameworks featuring subsidies or tax credits are essential to offset the high investment and operational costs associated with this technology. The costs encompass the capture equipment, CO2 transport, and subsurface storage, each varying significantly based on various factors, including geographical and economic conditions.
A 2025 presentation to the European Parliament highlighted these costs, estimating them to range from EUR 105 (USD 122) to EUR 280 (USD 326) per tonne of CO2 disposed. Without direct subsidies, industries find it challenging to engage in CCUS projects, particularly when carbon prices in the EU Emissions Trading System (ETS) have averaged around EUR 75/tCO2 in 2025, far below the lower-end disposal costs.
The Ongoing Decline of CCUS’s Share
The IEA’s 2025 WEO reflects a broader trend of downgrading the envisioned role of CCUS in decarbonization strategies. From accounting for 13% of total carbon removal in 2021, CCUS’s contribution has plummeted to below 5% in 2025. This decline symbolizes the increasing feasibility of alternative options for achieving substantial decarbonization, primarily through renewables, electrification, and enhanced energy efficiency measures.
CCUS: High Costs and Technical Limitations
The high expenses associated with CCUS arise from two main factors: the customized nature of project designs and significant exposure to inflation in materials and equipment. Different industrial applications necessitate tailored CO2 separation systems, complicating the technology’s scalability. While components for CCUS systems are generally standard, the unique demands of CO2 processing often require costly special materials, adding to the overall financial burden.
Moreover, unlike the rapidly declining costs of solar photovoltaic and battery storage technologies, CCUS has struggled to achieve similar economies of scale, presenting a substantial barrier to its widespread adoption.
The Marginal Role of CCUS in Future Energy Scenarios
In summary, the findings of the IEA’s WEO 2025 make it clear that CCUS is expected to play a minimal role in global energy generation by 2050. CCUS is projected to contribute just 1.2% to global energy generation, with a substantial portion of that tied to traditional fossil fuels. With less than 5% contribution expected from CCUS by 2050, the technology appears increasingly relegated to the margins of our future energy landscape. The emphasis clearly lies elsewhere, with renewable energy technologies taking center stage in the global shift toward a sustainable energy framework.