A fragmented path: resilience of fossil fuels versus accelerating renewables
The energy transition is proving far more complex than foreseen just a few years ago. That is the key finding of Beyond the Energy Transition, a report published by S&P Global Commodity Insights, a division of S&P Global that analyzes global energy and commodity markets.
In 2024, fossil fuel demand was about 5% higher than projected in 2021, while non-hydro renewable capacity exceeded expectations by 22%. This dual dynamic underscores an apparent contradiction: fossil fuels remain resilient and central in the energy mix, while renewables are growing faster than anticipated. The transition is therefore unfolding not along a linear trajectory, but as a mosaic of diverging trends that coexist and intertwine.
To capture this complexity, the report outlines five scenarios for the energy transition. These are not forecasts, but analytical tools designed to evaluate how demand, emissions, and technologies might evolve under different circumstances. The variables considered include governance, technological innovation, and geopolitics, all of which can shift the pathway toward decarbonization.
CI Base Case
This scenario envisions a world facing instability and uncertainty yet able to maintain a decarbonization trajectory, albeit without rapid progress. It assumes governments can manage economic and geopolitical crises without straying significantly from climate goals. Emissions decline only gradually and remain above levels consistent with the 2°C target.
Adaptation
A fossil-fuel-dominated outlook. Global economic growth continues to be fueled by oil and gas, with high demand extending over the long term. This occurs if states prioritize energy security and lower costs over climate objectives. Emissions rise steadily through 2060, making the Paris Agreement targets unattainable.
Fracture
Technological progress advances quickly, but governance is weak and fragmented. Markets move unevenly, with sharp disparities between developed and emerging economies. Decarbonization advances in some regions but lags in others, creating imbalances and political instability.
Renaissance
The turning-point scenario. Emerging economies drive an accelerated transition through strong investment in clean infrastructure. This occurs if governments and companies commit decisively to renewables and low-carbon technologies, sharply cutting fossil fuel use. In this case, the United States and European Union move closer to climate neutrality by 2060. Emissions fall substantially, keeping the 2°C threshold within reach.
Net-Zero 2050
The most ambitious vision, requiring radical action and robust global cooperation, with very high economic and political costs. It can occur only if major economies adopt coordinated measures to eliminate nearly all emissions by mid-century. The report judges this outcome unlikely given today’s political and economic constraints.
Emissions impacts of the energy transition
S&P Global’s analysis highlights diverging emissions outcomes across scenarios. In Adaptation, global emissions not only fail to decline but rise through 2060, worsening climate conditions. By contrast, Renaissance shows steep emission reductions, enabling the U.S. and EU to approach climate neutrality by mid-century. Only Renaissance and Net-Zero 2050 align with temperature containment below dangerous levels, while all other scenarios exceed the 2°C threshold.
The report is unequivocal on one point: the +1.5°C limit is no longer attainable, with consequences that will persist for decades. The energy transition remains decisive for reducing climate impacts, but its trajectory will depend on political and economic choices.
Regional differences in the energy transition
The study stresses that future pathways will vary widely by region.
- China: renewables are expanding rapidly, but fossil fuels still account for a significant, though declining, share.
- India: coal remains central. In Base Case and Adaptation, its role stays dominant, while in Renaissance it is drastically curtailed.
- European Union: the region most aligned with climate goals, partly due to the energy shock from the war in Ukraine, which accelerated decarbonization and reduced fossil imports.
- United States: the trajectory is more uncertain. In some scenarios, the transition slows, with prolonged reliance on oil and gas.
The energy transition will thus be far from uniform, shaped by local economic, political, and social conditions.
Governance and technology as decisive factors
According to S&P Global, two variables will be critical in determining which scenario prevails: governance and technological progress. Stable and cooperative governance is essential for accelerating clean technology adoption and ensuring policy coherence. Conversely, weak institutions and fragmentation risk slowing the process.
New technologies, from advanced renewables to storage systems and hydrogen, can deliver major acceleration, but their rollout depends on political context and available investment. Ultimately, the scenarios for the energy transition will be defined by the interplay between institutions and innovation, with emerging markets taking a growing role and global geopolitics acting as a decisive force.