CORSIA Carbon Credit Prices, Demand, and Supply: What the Future Holds

CORSIA Carbon Credit Prices, Demand, and Supply: What the Future Holds

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), launched by the International Civil Aviation Organization (ICAO), plays a major role in helping airlines offset their emissions and meet climate goals.

International air travel is bouncing back after the pandemic. This drives a surge in demand for carbon credits under CORSIA. A new report by Allied Offsets forecasts strong growth in both demand and prices of eligible carbon credits from 2025 through 2035.

This article explores the latest trends, price scenarios, and what this means for airlines, project developers, and the broader voluntary carbon market.

Rising Demand: Airlines Set to Purchase More Credits

Industry estimates say that demand for CORSIA-eligible carbon credits will hit 101 to 148 million tonnes (MtCO₂e) during Phase I (2024–2026). Demand will rise quickly in Phase II (2027–2035).

Cumulative needs are expected to be between 502 and 1,299 MtCO₂e. This will depend on how much international air traffic grows and how CORSIA expands its coverage.

This big increase comes from the rebound in international air travel and the start of Phase II in 2027. During this phase, most ICAO member countries must take part.

By 2035, demand might exceed 1 billion tonnes in high-growth scenarios. That’s about the same as the yearly emissions of a major industrialized country.

To summarize projected cumulative demand:

  • Phase I (2024–2026): 101–148 MtCO₂e

  • Phase II (2027–2035): 502–1,299 MtCO₂e

This growth presents both challenges and opportunities. Airlines need enough credits to comply with regulations. At the same time, project developers and suppliers face pressure to increase the verified supply of eligible credits.

Price Outlook: A Wide Range with Upward Pressure

The report outlines three price scenarios for carbon credits based on different market dynamics:

  1. Low Scenario: Prices start at $14/tonne in a tight supply scenario and grow slowly to $25/tonne in under supply scenario.

  2. Medium Scenario: Prices rise from $15/tonne to $29/tonne.

  3. High Scenario: Prices climb sharply from $16/tonne to $34/tonne.

CORSIA carbon credit supply, demand, and prices
Source: Allied Offsets

Even in the conservative case, prices show modest growth. But in the high-demand scenario, prices could grow over the next decade.

On the other hand, MSCI outlines a range of price scenarios for CORSIA-eligible carbon credits as follows:

  • Phase I (2024–2026): $18–$51 per tonne

  • Phase II (2027–2035): $27–$91 per tonne (by 2033–2035)

Projected CORSIA prices for two of four modeled scenarios
Source: MSCI

This price rise shows that airlines face more pressure to secure high-quality credits. This is especially true as more projects focus on long-term removal instead of just temporary avoidance.

High prices might lead some airlines to invest in sustainable aviation fuel (SAF) or insets. These options help reduce emissions in their operations.

Supply Gaps and Quality Filters

CORSIA doesn’t allow just any carbon credit. ICAO has strict rules for what qualifies — including restrictions on project start dates, crediting periods, and approved methodologies. Only credits from approved programs (like Verra, Gold Standard, and ART TREES) that meet these standards are eligible.

The report estimates that:

  • Only about 543 MtCO₂e of eligible credits will be issued by 2027.

CORSIA carbon credits supply
Source: Allied Offsets

Supply is projected to lag behind demand. Reports suggest possible deficits of 12–43 MtCO₂e in Phase I. Phase II may face even larger shortfalls. This is likely if stricter quality filters are used. These filters include co-benefits, permanence, and additionality. The exact numbers for filtered supply aren’t given, but these criteria would greatly lower the usable pool.

CORSIA credits issued versus forecast supply
Source: AlliedOffsets

Currently, most eligible supply comes from avoided deforestation (REDD+) and renewable energy projects. As demand increases and quality standards get stricter, the market will likely move toward lasting carbon removal solutions. This includes methods like reforestation, biochar, and direct air capture (DAC).

Regional Insights: Where Supply Comes From

The current credit supply under CORSIA is heavily concentrated in a few countries:

  • India, China, and Brazil together account for over 50% of the available supply.

Africa has fewer CORSIA-eligible credits now. However, it is expected to grow. This growth will focus on nature-based solutions, such as afforestation and cookstove projects.

This geographic concentration means that any changes in policy, political stability, or project approvals in key countries could disrupt supply. For example, if India were to change its rules on carbon credit exports — as some officials have suggested — global supply could shrink quickly.

Interest is growing in boosting credit generation in Southeast Asia and Latin America. Many areas there have good land for reforestation and carbon farming.

Market Trends and Implications for Airlines

CORSIA credits are part of the larger voluntary carbon market. This market has attracted a lot of interest from companies and governments. According to MSCI report, voluntary carbon markets could reach $250 billion annually by 2050.

carbon credit market value 2050 MSCI
Source: MSCI

But today’s CORSIA credits are selling for far less than the cost of removing CO₂ using high-tech methods like DAC, which can exceed $300 per tonne. This price gap has raised questions about credit quality and how buyers can demonstrate real climate impact.

SEE MORE: CORSIA Credits Soaring Costs: How They Are Reshaping Aviation’s Future

Some key trends include:

  • Airlines such as Delta, United, and Lufthansa are now mixing credit purchases with investments in SAF. They also support offsets from reforestation or engineered removals.

  • Programs like SBTi (Science-Based Targets initiative) encourage firms to reduce emissions. They also promote high-quality removals instead of bulk offsetting.

For airlines, this means they may need to:

  • Budget more for compliance over time

  • Diversify carbon offset portfolios

  • Communicate clearly about the credibility of their offsets

The Bigger Picture: What Comes Next

The Allied Offsets report shows that corporate buyers, like airlines, play a key role in global carbon markets. Their large, long-term offtake agreements — such as Microsoft’s 18 MtCO₂e deal with Rubicon Carbon — are shaping demand signals for the next decade.

ICAO plans to tighten CORSIA rules in future reviews. This may mean more removals and limits on older avoidance projects. This could further reduce supply and raise prices.

Policymakers can boost support for in-sector measures. This includes increasing SAF production and encouraging new removal technologies.

Airlines face challenges now. They must deal with rising prices, new rules, and increased scrutiny on carbon offsetting. In the long run, using durable carbon removals could change aviation and the climate finance system.

CORSIA is entering a critical phase. Demand is set to rise sharply. Meanwhile, supply is tightening due to stricter quality controls. As the report shows, the window to build a balanced, credible carbon market is narrowing. The next few years will shape the cost and credibility of airline decarbonization for decades to come.

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SolarBank Stays Strong as Trump’s Clean Energy Rollbacks Loom

SolarBank Stays Steady as Trump's Clean Energy Rollbacks Loom

Disseminated on behalf of SolarBank Corporation

The U.S. House of Representatives proposes rollbacks to key clean energy programs, which raises questions across the sector. Among the targeted provisions are the residential solar tax credit and funding elements of the Inflation Reduction Act (IRA)—a landmark climate package that helped spark record investment in clean energy over the past two years.

The proposal suggests ending the 30% federal residential solar tax credit by the end of 2025. This is nearly 10 years sooner than expected. This policy change could greatly affect companies in the solar industry.

Understanding the Proposed Policy Change

The residential solar tax credit, or Solar Investment Tax Credit (ITC) is Section 25D of the U.S. Tax Code. It lets homeowners claim 30% of the cost of installing solar panels. This credit appears on their federal tax returns.

The credit, part of the Inflation Reduction Act, was to last until 2032. It will start to decrease gradually in 2033. The schedule is below. However, the new proposal aims to terminate this credit by December 31, 2025. 

solar tax credit sched
Source: Ecowatch

Experts warn that this sudden change might raise costs for consumers. It could also lower demand for residential solar installations and lead to job losses in the sector. Small solar installation businesses often rely on credit for competitive pricing. This makes them especially vulnerable.

The solar industry has expressed strong opposition to the proposed cuts. Many stakeholders say the tax credit has helped grow residential solar. It creates jobs and promotes energy independence.

The Solar Energy Industries Association says the residential solar market has grown 10x in the last ten years. The tax credit has played a big part in this growth.

The proposal passed the House Ways and Means Committee. However, it still has many hurdles to clear before it can become law. Some lawmakers, including Republicans from areas that benefit from clean energy investments, are worried about the possible negative effects of the cuts.

The final outcome will depend on negotiations in both the House and Senate. 

Policy Uncertainty and Its Limits

For many solar developers, these changes could signal uncertainty and disruption. For SolarBank, a developer focused on community and commercial-scale solar (as opposed to residential solar installations), the path forward remains steady. This is due to careful planning, strategic focus, and a shift in business model that favors long-term sustainability.

The company’s CEO, Dr. Richard Lu, says the company’s business model is largely shielded from this turbulence, saying:

“Over the next several years we are not expecting any major changes or challenges from the potential changes to federal solar tax incentives. Support for our community solar projects comes at a state level, and we only focus on the 22 states that have community solar policy.”

This is a key distinction. SolarBank focuses on commercial, industrial, and community solar projects. Unlike residential solar companies, it benefits from strong state mandates and incentives.

Moreover, the timeline for scaling back federal tax credits for commercial solar systems doesn’t begin until 2028 or 2029. SolarBank has already factored that into its long-term planning. Dr. Lu emphasized this, noting:

“We work with industrial and commercial large-scale solar projects, and not residential. The schedule to reduce tax incentives… has already been included in our operations to mitigate the effect.”

Resilience Through Integration

SolarBank isn’t shaken by the headlines. Instead, it is strengthening its operations. Its resilience comes from a vertically integrated model. This model covers development, construction, and long-term operations and maintenance.

This structure helps the company control costs, speed up deployment, and rely less on uncertain external factors. Dr. Lu stated:

“We have a vertically integrated system… which gives us the capability to manage our costs and simplify our process. This is really where our lean set up is competitive.”

That competitiveness is especially important in a rapidly evolving energy market. AI data centers, electric vehicles, and digital industries are driving high electricity demand.

Data center power use in the U.S. will grow twofold in 2030 due to AI. Meanwhile, traditional energy systems are having a tough time keeping up.

US data centers power use under 4 scenarios EPRI analysis
Source: Electric Power Research Institute (EPRI)

SolarBank sees this mismatch as an opportunity. The company can meet rising energy needs by staying agile and keeping costs in check, that is faster than many big, slower competitors.

Shifting from Build-to-Sell to Build-to-Own

In response to both market evolution and policy unpredictability, SolarBank is also adjusting its core business strategy. Once focused on a build-to-sell model, the company is now emphasizing build-to-own projects.

The CEO noted that this shift aims to create a more stable revenue base, making SolarBank less reliant on one-off transactions and external funding sources. He said:

“This will boost our long-term recurring revenue. It makes it easier to take on new projects with less external funding.”

This change also helps the company hedge against potential federal funding shortfalls. SolarBank can continue to grow by attracting private investment and forming strategic partnerships. This will help, even with solar tax credit challenges.

A recent collaboration with Qcells, involving the use of U.S.-manufactured solar modules, is one example of how the company is preparing for multiple future scenarios. SolarBank has the following project pipeline that will bring significant growth to the company:

SolarBank projects
Source: SolarBank

A Message for Policymakers

The company is confident in its own path. However, Dr. Lu emphasized the broader value of maintaining federal support for clean energy—especially for community solar and distributed energy systems. He remarked:

“Consistent and long-term support… is not just an investment in clean energy but also in social equity and economic resilience.” 

Community solar programs are especially important for expanding access to renewable energy among low- and moderate-income households, renters, and underserved communities. Without strong policy support, these groups risk being left behind in the clean energy transition.

Dr. Lu added:

“Stable policies and incentives are crucial for planning and investment. By supporting these initiatives, policymakers can drive job creation, foster local economic development, and advance national goals for carbon reduction and climate resilience.”

What’s The Future for Solar?

SolarBank’s calm response shows its strong position, even if the headlines are unsettling. The company is ready to succeed by using state support, seeking private investment, and adjusting its business model. This approach helps it thrive despite federal uncertainty.

Still, the broader industry faces real questions. Will Congress follow through with proposed rollbacks? Can community solar continue to grow if the tax credits vanish? And what does this mean for energy equity in the U.S.?

For now, SolarBank believes that its focus on fundamentals, policy-savvy expansion, and forward-thinking leadership will carry it through.

This report contains forward-looking information. Please refer to the SolarBank press release entitled “SolarBank Announces Third Quarter Results” for details of the information, risks and assumptions.


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Google and energyRe Boost Clean Energy in South Carolina with 600 MW Solar Deal

google

energyRe, a U.S.-based renewable energy developer, has signed a new renewable energy agreement with Google to support over 600 megawatts of solar and solar-plus-storage projects in South Carolina. Through this agreement, Google will invest in and buy Renewable Energy Credits (RECs) from these projects to reduce its emissions across operations and the global value chain.

Notably, this is the second time Google has partnered with energyRe, and together. Both deals will bring more than 1 gigawatt (GWac) of clean energy to the grid.

Amanda Peterson Corio, Head of Data Center Energy, said,

“Strengthening the grid by deploying more reliable and clean energy is crucial for supporting the digital infrastructure that businesses and individuals depend on. Our collaboration with energyRe will help power our data centers and the broader economic growth of South Carolina.”

energyRe and Google: Powering Progress with Solar and Storage Projects

In October 2024, energyRe signed a 12-year agreement with Google to provide clean energy and Renewable Energy Credits (RECs) from a new 435-megawatt (MWdc) solar project in South Carolina. energyRe will develop, own, and operate the project, which will generate enough electricity to power more than 56,000 homes each year.

Google and energyRe completed the deal through LEAP™—a clean energy procurement platform co-developed by Google and LevelTen Energy. LEAP™ simplifies and speeds up the process of securing renewable energy agreements.

Boosting America’s Clean Energy Footprint

energyRe is a leading independent clean energy company based in the United States. The company focuses on delivering large-scale renewable energy solutions across utility-scale solar, onshore and offshore wind, transmission infrastructure, distributed generation, and battery storage.

With offices in New York, Houston, Indianapolis, and Charleston, energyRe is driving the U.S. energy transition with an emphasis on building robust, regional electric grids that can handle growing clean energy demands.

Its national renewable portfolio includes:

  • 1,520 MWdc of contracted solar assets
  • 398 MWh of battery storage capacity

These projects can potentially enhance grid reliability, reduce energy costs for consumers, and help cities cut carbon emissions.

Miguel Prado, CEO of energyRe, also commented,

“This agreement is a milestone in energyRe’s mission to develop innovative and impactful clean energy solutions for the future. We’re honored to partner with Google to help advance their ambitious sustainability and decarbonization objectives while delivering dependable, locally sourced clean energy to meet growing energy demands.”

Flexible Clean Energy for All

energyRe offers flexible purchase agreements to meet different customer needs. It provides both bundled energy with Renewable Energy Credits (RECs) and REC-only options. These agreements can be delivered physically or financially nationwide, making it easier for companies like Google to access renewable energy.

With this latest deal, energyRe continues to play a vital role in decarbonizing U.S. cities, supporting transmission-led generation, and creating a resilient, clean energy future.

Google Stays on Track for Net-Zero by 2030

Google plans to reach net-zero emissions across its operations and value chain by 2030. Its strategy includes reducing emissions where possible and using carbon removal to handle what remains.

In 2023, Google’s total emissions reached 14.3 million tons of CO₂ equivalent—a 13% rise from the previous year. The increase came mostly from higher data center power use and supply chain growth, though the pace of increase slowed.

Google emissions
Source: Google

24/7 Carbon-Free Energy

In 2023, Google made solid progress on its clean energy journey. It maintained a global average of 64% carbon-free energy across all its offices and data centers, even as electricity use increased. In fact, 10 of its grid regions reached at least 90% carbon-free energy.

Thus, instead of just matching its annual energy use with clean power, Google wants to use carbon-free electricity every hour, everywhere it operates. That’s why this partnership with energyRe is significant for the tech giant.

These new projects will deliver local clean energy and support South Carolina’s clean energy targets as well.

Additionally, Google also avoids buying older “unbundled” energy certificates that would lower its reported emissions but don’t lead to new clean energy. Instead, it focuses on newer, bundled projects that bring real impact.

google
Source: Google

Betting on Renewables

Some innovative technologies Google uses to cut down its emissions are: smart solar panels like dragonscale rooftops and solar facades. It also applies machine learning to forecast wind energy and shifts computing tasks based on the carbon levels of local power grids.

Moreover, Google is backing new clean energy tech like next-gen geothermal and carbon removal solutions such as direct air capture and BECCS. It’s also helping improve how clean energy is tracked by supporting time-based certificates that measure real-time clean energy use.

So far, Google has signed contracts for over 7 gigawatts of renewable energy and helped pioneer hourly clean energy tracking, giving the world a better way to measure carbon-free electricity.

google renewable energy
Source: Google

All in all, by expanding its partnership with energyRe, Google continues to move closer to its goal of carbon-free energy round the clock. Furthermore, the partnership is a key step in aligning corporate climate action with local clean energy development.

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2025 EV Sales Surge: Which Countries Are Winning the Electric Race?

2025 EV Sales Surge: Which Countries Are Leading the Charge?

Electric vehicle (EV) sales around the world have grown fast in recent years. In 2024, global electric car sales topped 17 million, representing over 20% of all new cars sold worldwide. That’s more than triple the number sold just 4 years earlier, according to the latest report by the International Energy Agency.

The momentum continues into 2025, with EV sales expected to exceed 20 million, or more than one-quarter of all new vehicle sales globally. The year kicked off strong: in the first quarter alone, more than 4 million EVs were sold, marking a 35% increase compared to Q1 2024.

quarterly EV sales q1 2025
Source: IEA

This explosive growth shows how quickly the global auto market is shifting toward electric mobility—driven by falling battery prices, better infrastructure, and strong policy support in key markets.

Countries like China, the United States, and several in Europe are leading the charge in this shift. Their efforts are helping to reduce emissions, cut oil use, and push new technologies into the spotlight.

Let’s take a deeper dive into the IEA’s Global EV Outlook 2025 Report to see who’s leading the electric car revolution and other key industry trends.

China’s EV Empire Expands

China has once again proven itself the global leader in electric car adoption. In 2024, electric vehicles made up almost 50% of all car sales in the country. China also accounted for nearly two-thirds (65%) of all electric cars sold worldwide that year.

EV production by region 2024
Source: IEA

What’s driving this boom? One reason is cost. Over half of all electric cars sold in China now cost less than similar gasoline-powered models.

Government support has also played a big role. For example, in April 2024, China launched a trade-in program that encourages people to buy new electric or gasoline cars by giving them money to exchange old ones. While this scheme supports both types of vehicles, it has helped electric cars become even more attractive to buyers.

As seen below, the Chinese government has spent USD30 billion on EV production.

government spending on EV by region 2024
Source: IEA

In addition, the Chinese government has extended EV tax exemptions through 2027 and trade-in grants through 2025. These policies give people more reasons to go electric. With all these efforts, under current policies, China is expected to hit an 80% EV sales share by 2030.

Europe Charges Ahead Despite Road Bumps

Europe continues to be a strong performer in the electric car space. Many European countries are seeing electric cars take up a larger share of new vehicle sales. In places like Norway, the share is already above 80%, while in others like Germany, France, and the Netherlands, the share is steadily rising.

The European Union supports this growth by setting strict emissions limits, offering purchase incentives, and investing in charging infrastructure.

In fact, some countries have already announced bans on the sale of new gasoline and diesel cars by the early 2030s. This sends a clear signal to both consumers and automakers to prepare for an all-electric future.

Even though sales dipped slightly in some parts of Europe during the first half of 2024 due to inflation and policy changes, demand bounced back in the second half of the year. Falling battery costs and a wide range of available models helped fuel this recovery. Europe remains a critical market, making up around 20% of global EV sales.

The European Automobile Manufacturers Association (ACEA) reports that new electric car registrations in Europe, including the UK, grew by 28% in the first quarter. This increase brought the total to 573,500 units, mainly driven by a strong rebound in Germany.

new car registrations by power source EU
Chart from: Financial Times

America Hits the Accelerator

The United States also saw strong growth in electric car sales in 2024 and early 2025. Sales rose about 20% compared to the previous year.

The Inflation Reduction Act (IRA), passed in 2022, played a big part in this rise. The IRA gives buyers tax credits for new and used electric vehicles and helps manufacturers build EVs and batteries in the U.S.

By the end of 2024, EVs made up about 10% of new car sales in the U.S. California leads all states, with EVs making up over 25% of new car sales. Other states, such as New York and Washington, are following closely behind.

Zero-emission vehicle sales remained flat in 2024 California
Source: Calmatters.org

New models from both U.S. and international carmakers are giving buyers more choices than ever. At the same time, the charging network is expanding, making it easier for people to switch to electric.

Other Countries Show Promise

While China, Europe, and the U.S. lead in total sales, several other countries are making big progress in 2025:

  • India is seeing fast growth, especially in two- and three-wheeled EVs. Affordable electric scooters and rickshaws are helping more people go electric. While electric car sales are still low, the numbers are growing quickly thanks to local manufacturing and incentives.
  • Southeast Asia, including countries like Thailand, Vietnam, and Indonesia, is beginning to scale up EV sales. Thailand aims to make 30% of its electric car production by 2030 and has started to attract foreign EV investment.
  • Latin America is still in the early stages, but countries like Brazil, Colombia, and Chile are rolling out policies to support EV growth. Charging networks are expanding slowly, and imports of electric vehicles are increasing.

Charging Infrastructure Supports Growth

One major reason behind the EV boom is the growing number of charging stations. In 2024 alone, the world added over 2 million public chargers, with most of them in China and Europe.

Fast chargers, which can charge a car in under 30 minutes, are becoming more common, making EVs practical even for long trips. Chinese carmaker BYD has announced its breakthrough in EV battery charging in just 5 minutes last month. 

In the U.S., public charging infrastructure is also improving. The federal government has invested billions in new charging stations, with a goal of building a nationwide network that works for everyone. More reliable and widespread charging reduces “range anxiety,” the fear that an EV will run out of battery far from a charger.

However, a major news came out recently that the Trump administration froze the $5 billion funding intended to EV chargers. This led some US states to bring the matter to court. The final decision will greatly impact the industry.

Automakers Race to Meet Demand

Automakers worldwide are responding to this demand shift. Nearly every major car company now offers electric models, and many plan to go fully electric in the next 10 to 15 years. For example:

  • General Motors aims to sell only zero-emission vehicles by 2035.
  • Volkswagen plans to make EVs 70% of its European sales by 2030.
  • BYD has already stopped making gas-only cars and is expanding rapidly into global markets.

The competition helps lower costs and improve technology. Battery range is improving, and newer models are becoming more affordable. As EVs get better and cheaper, more people are choosing them over traditional cars.

The EV market shows no sign of slowing down. If battery prices continue to fall and policies stay strong, sales in 2025 may hit a new record. With continued global effort, EVs could become the norm by the end of the decade.

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U.S. Nuclear Industry Set for Big Changes as Government Plans to Cut Red Tape

U.S. Nuclear Industry Set for Big Changes as Government Plans to Cut Red Tape

The U.S. nuclear power industry is about to experience its biggest shift in decades. The White House plans to announce new executive orders that could make the Nuclear Regulatory Commission (NRC) largely powerless. These orders let the Department of Energy (DoE) and Department of Defense (DoD) skip the NRC’s strict rules. This will speed up the construction of new nuclear power plants.

For over 5 decades, the NRC has been the main government agency overseeing nuclear plant safety and licensing. But many experts and industry leaders say the NRC’s complicated rules and slow approvals have stopped new nuclear plants from being built.

The NRC’s licensing process has grown from a simple 50-page document to an overwhelming 1,100 pages. The last approved reactor needed about 12,000 pages of paperwork. It also had millions of supporting documents.

Because of these heavy rules and outdated 1970s standards, the NRC hasn’t approved any new nuclear plant designs since 1978. Former NRC Commissioner Jeffrey Merrifield said the agency “doesn’t know when to stop” with new regulations. This is a major reason why new nuclear projects struggle to move forward.

US nuclear power electricity vs nuclear reactors
Source: Katusa Research

Why Both Political Parties Support Nuclear Energy

For the first time since President Nixon, both Democrats and Republicans agree on supporting nuclear power. Democrats want nuclear energy to help fight climate change and reach net-zero carbon goals. Republicans see it as vital for U.S. energy independence and creating new jobs.

Nuclear power is key to 3 big goals for the U.S.:

  • Nuclear Exports. The U.S. can regain leadership in exporting nuclear technology, which is expected to be a $1.9 trillion global market by 2050. Currently, China and Russia control two-thirds of this market.
  • National Security. Nuclear power supports the supply chain for nuclear weapons and is crucial for defense.
  • Energy Security. Nuclear energy offers a reliable, self-sufficient power source, helping reduce dependence on foreign energy.

Because of these reasons, Congress has passed multiple laws over the past decade to force the NRC to update and speed up its licensing process. But progress has been slow.

Other countries like Canada and the UK have already updated their nuclear approval systems. Canada is investing heavily in next-generation nuclear technology to amplify its clean power supply.

In 2024, the U.S. Congress passed the ADVANCE Act, which pushes the NRC to modernize. It aims to make reviews for advanced nuclear reactors simpler and faster. Still, the NRC has struggled to implement these changes.

Power Shift to the Department of Energy and Defense

The new executive orders will shift power away from the NRC and give more control to the Department of Energy and the Department of Defense. Both agencies strongly support nuclear energy and have large budgets to back new projects.

US federal nuclear energy budget
Source: Katusa Research

In 2022, the DoE started a $6 billion Civil Nuclear Credit Program. It aims to extend the life of current reactors and support new types of nuclear reactors. It’s also giving $1.5 billion to reopen the Palisades nuclear plant—the first such reopening in U.S. history. The DoE’s former secretary, Jennifer Granholm, said the U.S. needs to triple its nuclear reactors by 2050.

The DoD also uses nuclear power for its massive energy needs and owns mobile nuclear reactors. It can take risks that private companies cannot and has a budget that could fund enough nuclear power to cover 85% of U.S. electricity demand.

The DoD and DoE plan to team up and invest in advanced nuclear reactors. They aim to connect a new reactor to the grid in 3 years.

Why This Could Be a Historic Moment

These moves could kickstart a nuclear renaissance in the U.S., similar to the scale of the Manhattan Project during World War II. The government has signed contracts with companies to build advanced reactors by 2029. Billions of dollars in funding are expected to flow to this sector.

Experts believe this push will lower the cost of nuclear energy by about 60%, making it more competitive with other power sources. This could open new doors in uranium mining, nuclear fuel production, infrastructure, and nuclear tech investment.

What This Means for Private Nuclear Companies

The expected executive orders could be a game changer for private companies working on nuclear technology. Startups and energy developers have struggled for years. They deal with long delays, high costs, and complex paperwork to get approval for new nuclear reactors. Some applications have taken more than 10 years and cost hundreds of millions of dollars before a single shovel hits the ground.

With the NRC pushed aside, companies might finally have a faster path to approve and build new designs. This is key for startups creating advanced nuclear reactors and small modular reactors (SMRs). SMRs are smaller, safer, and easier to build than traditional plants.

Now, instead of waiting for NRC approval, companies may be able to work directly with the DoE or the DoD. These agencies are more supportive and flexible. They already have funding programs, partnerships with developers, and a goal to build advanced reactors quickly.

Private firms like TerraPower, X-energy, and Oklo have been waiting for years to move forward. Under the new system, these companies could see faster permits, more government contracts, and easier access to funding. They may even get a chance to work on national defense or grid reliability projects led by the DoE or DoD.

This shift could spark a wave of innovation, job creation, and clean energy development across the country. If it works, it could also encourage more investors to put money into nuclear startups—knowing the government is serious about getting projects built.

The Clock Is Ticking

With the new executive orders expected soon, the nuclear industry and investors have limited time to prepare for this wave of change. Many believe this could be one of the most important energy transitions in decades and offer profitable opportunities for those ready to act.

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Occidental and ADNOC’s $500M Texas DAC Deal Marks a Global Milestone in Carbon Removal

oxy

Occidental (Oxy) and its carbon-focused subsidiary 1PointFive have partnered with XRG, ADNOC’s energy investment company, to build a large Direct Air Capture (DAC) facility in South Texas. XRG is considering an investment of up to $500 million to support the project. The proposed plant would pull 500,000 tonnes of CO₂ from the air every year.

Occidental and 1PointFive: Driving Low-Carbon Energy Solutions

The global energy leader has major operations in the United States, the Middle East, and North Africa. In the U.S., Oxy ranks among the top oil and gas producers, with strong operations in the Permian Basin, DJ Basin, and the Gulf of Mexico.

But the company isn’t just focused on fossil fuels. Through its subsidiary Oxy Low Carbon Ventures, Occidental is taking major steps toward a cleaner future. In 2020, it launched 1PointFive to develop and scale up carbon removal and storage technologies for industries that are hard to decarbonize.

1PointFive has a clear mission to reduce CO₂ in the atmosphere and help limit global warming to 1.5°C by 2050, in line with the Paris Agreement. To achieve this, the company focuses on Carbon Capture, Utilization, and Storage (CCUS) as a key tool in the fight against climate change.

Pioneering Direct Air Capture and Clean Fuels

One of 1PointFive’s flagship technologies is Direct Air Capture, developed with Carbon Engineering. It also offers AIR TO FUELS, a clean fuel solution made using captured CO₂. These technologies are backed by large-scale underground storage hubs that safely lock away carbon.

Furthermore, Occidental brings years of experience in CO₂ transportation, use, and storage, making it well prepared to lead low-carbon energy projects. Together, they aim to grow responsibly, cut emissions, and support global climate goals.

Supporting Oxy’s Net Zero Strategy

Oxy aims to reach net-zero emissions from its operations and energy use by 2040. A key part of this plan is led by Oxy Low Carbon Ventures, which follows a four-part strategy: revolutionize, reduce, reuse/recycle, and remove.

In 2023, 1PointFive made significant progress by signing agreements to sell direct air capture (DAC) carbon dioxide removal (CDR) credits to major global companies. These credits help organizations reduce their greenhouse gas (GHG) footprints.

occidental oxy DAC credits
Source: Oxy

DAC CDR credits are unique compared to other carbon credits because:

  • They’re long-lasting: CO₂ is captured from the air and stored deep underground, where it stays safely for thousands of years.

  • They’re trustworthy: These credits use strong monitoring, reporting, and verification standards to ensure transparency and effectiveness.

By developing high-integrity, science-backed solutions like DAC, Occidental and 1PointFive are paving the way toward a lower-carbon future.

occidental net zero
Source: Oxy

Unlocking the Oxy-ADNOC Carbon Capture JV

Now talking about XRG, the global investment arm of ADNOC, based in Abu Dhabi, has a valuation of over $80 billion. It invests in lower-carbon energy and essential chemical solutions.

This potential joint venture exemplifies the fight against climate change using carbon capture technology. The press release revealed that the agreement was signed by Occidental CEO Vicki Hollub and ADNOC CEO Dr. Sultan Ahmed Al Jaber during a visit by former U.S. President Donald Trump to the UAE.

 “We are proud to advance our decades-long partnership with ADNOC and XRG on our South Texas DAC Hub, which we believe will deliver game-changing technology to support U.S. energy independence and global goals. Agreements like this, along with U.S. DOE support, demonstrate continued confidence in DAC as an investable technology that can create jobs and economic value in the United States and Texas.” 

What’s DAC and Why South Texas?

Direct Air Capture (DAC) pulls CO₂ directly from the atmosphere, which can then be stored underground or reused. As per the IEA, so far, 27 DAC plants are running globally, capturing only about 0.01 million tonnes of CO₂ per year. However, more than 130 large-scale DAC projects (each designed to capture over 1,000 tonnes annually) are now in the pipeline.

If all proposed facilities move ahead, DAC could capture 65 million tonnes annually by 2030. This figure is close to the level needed under the Net Zero Emissions by 2050 scenario. DAC plants typically take 2 to 6 years to build, making this target possible with strong policy backing.

direct air capture

According to BloombergNEF, the global market for carbon capture and removal could reach $100 billion by 2030. This growth comes from stricter climate rules, net-zero goals, and rising investment in clean tech.

carbon capture
Source: BloombergNEF

Currently, most projects are still in early planning stages and need market incentives to move forward. Supportive policies and pricing mechanisms will be key to making these carbon removal services viable.

U.S. Backs Big Direct Air Capture Projects

The IEA also highlighted that the United States has significantly invested in Direct Air Capture technology. Two large hubs in Texas and Louisiana will share $3.5 billion in federal funds and could pull 2 million tonnes of CO₂ from the air each year.

New incentives make these projects more attractive:

  • The Inflation Reduction Act raised the 45Q tax credit to $180 per tonne of CO₂ stored through DAC.
  • Projects as small as 1,000 tonnes per year can now qualify.
  • A federal buying program promises long-term contracts to purchase the CO₂ that DAC plants capture.

These moves aim to boost deployment and build a strong market for carbon removal in the U.S.

Moving on, this South Texas Project is planned at King Ranch in Kleberg County, a site near Gulf Coast industrial zones and energy infrastructure. This location is ideal for transporting and storing CO₂.

  • The hub has the potential to store up to 3 billion tonnes of carbon underground across 165 square miles.

Ongoing Progress and Support

  • Occidental is already building a DAC facility called STRATOS in West Texas. It’s expected to begin operations in 2025.
  • The U.S. Department of Energy has awarded Occidental up to $650 million to support DAC development in South Texas.
  • The technology behind DAC is becoming more reliable and cost-effective.

Interestingly, Occidental and ADNOC have been working together since signing an MoU in 2023. They are exploring opportunities in carbon capture and storage across both the U.S. and the UAE. They also partner on major energy projects like Al Hosn Gas, one of the largest gas developments in the Middle East.

Khaled Salmeen, Chief Operating Officer, XRG, also commented on this JV,

“Our longstanding partnership with Occidental continues to drive scalable, high-growth and strategically attractive projects that create long-term sustainable value. The U.S. is a priority market for XRG and we look forward to building on this partnership as we continue to invest in strategic projects across the energy value chain.”

This partnership could mark a major step forward in the use of carbon capture to tackle climate change. With significant backing, ideal location, and proven collaboration, Occidental, 1PointFive, and XRG are aiming to scale up climate tech with South Texas as its base.

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ENGIE Supercharges 2.4 GW Battery Storage in Texas & California with CBRE Partnership

engie

ENGIE North America has partnered with CBRE Investment Management to grow its battery storage presence across the U.S. The deal includes a 2.4 GW portfolio made up of 31 battery energy storage projects spread across Texas and California.

It’s one of ENGIE’s biggest operating partnerships in the country and ranks among the largest battery storage asset transactions in the sector.

Even after the deal, ENGIE remains in control. The company will continue to operate the assets while CBRE brings in new capital to support future growth.

Massive Deal with CBRE Boosts Engie’s Clean Energy Ambitions

ENGIE North America is based in Houston, Texas. It’s part of the global ENGIE Group, investing more than €10 billion each year to lead the global energy transition.

The press release revealed that the 2.4 GW battery storage capacity spans 31 projects in the ERCOT and CAISO markets. ENGIE remains the majority owner and operator of the assets. CBRE Investment Management, which has over $149 billion in assets, joins as a strategic partner in this large-scale clean energy expansion.

Robert Shaw, Managing Director, Private Infrastructure Strategies at CBRE Investment Management, commented,

“We are excited to partner with ENGIE on this high-quality, scaled battery storage portfolio with a strong operating track record. This investment reflects our proven strategy of investing in infrastructure 2.0 assets that leverage the breadth of the CBRE IM platform and benefit from strong contracted revenue and macro digitalization and decarbonization tailwinds.”

Thus, this partnership supports ENGIE’s strategy to accelerate clean energy deployment.

Dave Carroll, Chief Renewables Officer and SVP, ENGIE North America, said,

“We are delighted that ENGIE and CBRE IM are partnering in this industry-leading transaction, supporting 2.4 GW of storage that will support the growing demand for power in Texas and California. The scale of this portfolio reflects ENGIE’s commitments to meeting the energy needs of the U.S. and increasing the resilience of the ERCOT and CAISO grids. CBRE IM’s investment reflects their confidence in ENGIE’s proven track record in developing, building, operating and financing renewable assets, both in North America and globally.”

North America’s Battery Storage Market Set to Soar by 2030

The battery energy storage market in North America is on a strong growth path. According to Grand View Research, the market is projected to hit $10.72 billion by 2030, growing at a compound annual growth rate (CAGR) of 30.7% from 2024 to 2030.

Back in 2023, the market brought in around $1.65 billion in revenue. Among all applications, the commercial sector led the way, generating the highest revenue that year.

With rising demand for grid stability, clean energy integration, and backup power, battery storage systems are quickly becoming a key part of North America’s energy future.

North America battery energy storage systems market, 2018-2030 (US$M)

north america battery storage
Source: Grand View Research

Another company that is growing its solar footprint across North America is SolarBank Corporation (NASDAQ: SUUN; Cboe CA: SUNN; FSE: GY2).

Recently, it signed a $100 million deal with a California-based real estate and infrastructure investor, CIM Group, to support solar projects of 97 megawatts (MW) across the country.

SolarBank also develops renewable energy projects in Canada and the USA, and its Battery Energy Storage System (BESS) project in Ontario is of paramount priority.

Leading the Storage Surge

In North America, ENGIE now has more than 11 GW of renewable and battery storage projects, both operating and under construction.

Of this, 25 grid-scale storage projects already deliver nearly 2 GW of capacity, and another 2 GW is being built. Globally, ENGIE aims to reach 10 GW of energy storage capacity by 2030.

Battery storage plays a key role in the energy transition. It helps balance the grid by storing electricity from renewable sources and releasing it when demand spikes or supply drops. This improves reliability and reduces emissions.

More Than Just Storage: ENGIE’s Full Energy Stack

ENGIE’s energy solutions go beyond batteries. The company delivers on-site solar with integrated storage, helping businesses reduce their energy costs while using clean power during peak demand hours.

It also develops district energy systems and central plants that provide heating, cooling, and electricity for large campuses, hospitals, and data centers.

In addition, ENGIE

  • Builds microgrids for backup power during outages
  • Designs electric vehicle charging stations for fleets.
  • Upgrade HVAC systems, lighting, and building controls to boost energy efficiency.
  • Converts organic waste into renewable natural gas

ENGIE supplies renewable energy directly to customers through long-term contracts and Renewable Energy Credits. It has been offering retail electricity in North America since 2002 and continues to support clients with customized green energy solutions, including both physical and virtual power purchase agreements.

Notably, its community solar programs have 100 MW of solar energy capacity.

Engie’s 2045 Net Zero Target

ENGIE has set bold climate targets. It plans to reach net zero across all scopes by 2045. By 2030, it aims for 80 GW of renewable capacity and wants renewables to make up 58% of its total electricity mix.

Recently, the company also signed a preliminary agreement with Cipher Mining Inc. to expand its renewable energy portfolio to supply 300 MW of clean wind energy to a new data center in Texas. This marks ENGIE’s entry into the AI-driven data infrastructure space with a sustainable twist.

engie renewable energy
Source: Engie

Its greenhouse gas targets for 2030 include removing 43 million metric tons from electricity, heat, and cooling, 52 million metric tons from fossil gas use, and zero emissions from its operations.

engie emissions net zero
Source: Engie

ENGIE’s energy services also help customers avoid up to 45 million metric tons of emissions, making it a key player in global decarbonization.

In 2023, it reduced the carbon intensity of its energy production to 131.4 grams of CO₂ equivalent per kilowatt-hour, marking a 13.4% drop from 2022 and a 70.3% decrease since 2012.

The company’s Scope 1 emissions, which cover direct CO₂ emissions, dropped by more than 5.5 million tons throughout the year. It fell from 30 million tons in 2022 to 24.5 million tons in 2023, a total reduction of 18.2%.

engie emissions
Source: Engie

ENGIE’s new partnership with CBRE Investment is a big step toward a cleaner energy future. By growing its battery storage projects in Texas and California, ENGIE is helping make the power grid more reliable and supporting America’s energy transition.

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U.S. Nuclear Industry Set for Big Changes as Government Plans to Cut Red Tape

U.S. Nuclear Industry Set for Big Changes as Government Plans to Cut Red Tape

This is a special guest editorial from Katusa Research.

The U.S. nuclear power industry is about to experience its biggest shift in decades. The White House plans to announce new executive orders that could make the Nuclear Regulatory Commission (NRC) largely powerless. These orders let the Department of Energy (DoE) and Department of Defense (DoD) skip the NRC’s strict rules. This will speed up the construction of new nuclear power plants.

For over 5 decades, the NRC has been the main government agency overseeing nuclear plant safety and licensing. But many experts and industry leaders say the NRC’s complicated rules and slow approvals have stopped new nuclear plants from being built.

The NRC’s licensing process has grown from a simple 50-page document to an overwhelming 1,100 pages. The last approved reactor needed about 12,000 pages of paperwork. It also had millions of supporting documents.

Because of these heavy rules and outdated 1970s standards, the NRC hasn’t approved any new nuclear plant designs since 1978. Former NRC Commissioner Jeffrey Merrifield said the agency “doesn’t know when to stop” with new regulations. This is a major reason why new nuclear projects struggle to move forward.

US nuclear power electricity vs nuclear reactors
Source: Katusa Research

Why Both Political Parties Support Nuclear Energy

For the first time since President Nixon, both Democrats and Republicans agree on supporting nuclear power. Democrats want nuclear energy to help fight climate change and reach net-zero carbon goals. Republicans see it as vital for U.S. energy independence and creating new jobs.

Nuclear power is key to 3 big goals for the U.S.:

  • Nuclear Exports. The U.S. can regain leadership in exporting nuclear technology, which is expected to be a $1.9 trillion global market by 2050. Currently, China and Russia control two-thirds of this market.
  • National Security. Nuclear power supports the supply chain for nuclear weapons and is crucial for defense.
  • Energy Security. Nuclear energy offers a reliable, self-sufficient power source, helping reduce dependence on foreign energy.

Because of these reasons, Congress has passed multiple laws over the past decade to force the NRC to update and speed up its licensing process. But progress has been slow.

Other countries like Canada and the UK have already updated their nuclear approval systems. Canada is investing heavily in next-generation nuclear technology to amplify its clean power supply.

In 2024, the U.S. Congress passed the ADVANCE Act, which pushes the NRC to modernize. It aims to make reviews for advanced nuclear reactors simpler and faster. Still, the NRC has struggled to implement these changes.

Power Shift to the Department of Energy and Defense

The new executive orders will shift power away from the NRC and give more control to the Department of Energy and the Department of Defense. Both agencies strongly support nuclear energy and have large budgets to back new projects.

US federal nuclear energy budget
Source: Katusa Research

In 2022, the DoE started a $6 billion Civil Nuclear Credit Program. It aims to extend the life of current reactors and support new types of nuclear reactors. It’s also giving $1.5 billion to reopen the Palisades nuclear plant—the first such reopening in U.S. history. The DoE’s former secretary, Jennifer Granholm, said the U.S. needs to triple its nuclear reactors by 2050.

The DoD also uses nuclear power for its massive energy needs and owns mobile nuclear reactors. It can take risks that private companies cannot and has a budget that could fund enough nuclear power to cover 85% of U.S. electricity demand.

The DoD and DoE plan to team up and invest in advanced nuclear reactors. They aim to connect a new reactor to the grid in 3 years.

Why This Could Be a Historic Moment

These moves could kickstart a nuclear renaissance in the U.S., similar to the scale of the Manhattan Project during World War II. The government has signed contracts with companies to build advanced reactors by 2029. Billions of dollars in funding are expected to flow to this sector.

Experts believe this push will lower the cost of nuclear energy by about 60%, making it more competitive with other power sources. This could open new doors in uranium mining, nuclear fuel production, infrastructure, and nuclear tech investment.

What This Means for Private Nuclear Companies

The expected executive orders could be a game changer for private companies working on nuclear technology. Startups and energy developers have struggled for years. They deal with long delays, high costs, and complex paperwork to get approval for new nuclear reactors. Some applications have taken more than 10 years and cost hundreds of millions of dollars before a single shovel hits the ground.

With the NRC pushed aside, companies might finally have a faster path to approve and build new designs. This is key for startups creating advanced nuclear reactors and small modular reactors (SMRs). SMRs are smaller, safer, and easier to build than traditional plants.

Now, instead of waiting for NRC approval, companies may be able to work directly with the DoE or the DoD. These agencies are more supportive and flexible. They already have funding programs, partnerships with developers, and a goal to build advanced reactors quickly.

Private firms like TerraPower, X-energy, and Oklo have been waiting for years to move forward. Under the new system, these companies could see faster permits, more government contracts, and easier access to funding. They may even get a chance to work on national defense or grid reliability projects led by the DoE or DoD.

This shift could spark a wave of innovation, job creation, and clean energy development across the country. If it works, it could also encourage more investors to put money into nuclear startups—knowing the government is serious about getting projects built.

The Clock Is Ticking

With the new executive orders expected soon, the nuclear industry and investors have limited time to prepare for this wave of change. Many believe this could be one of the most important energy transitions in decades and offer profitable opportunities for those ready to act.

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How EV Adoption is Reshaping Global Oil Demand: IEA’s 2025 Outlook and 2030 Forecast

EV

For decades, oil was the backbone of global transport. It powered nearly every vehicle, pushing oil demand ever higher. Infrastructure significantly grew around extraction, refining, and distribution. But with mounting concerns over emissions and climate change, the search for cleaner alternatives gained momentum. Electric vehicles (EVs) have emerged as a game changer in this shift.

IEA recently published its Global EV Outlook 2025, where it has predicted,

  • By 2030, EVs are set to replace more than 5 million barrels of oil per day (mb/d) globally, with China’s expanding EV fleet making up half of that impact.

Let’s deep dive into this report and understand how the rise of EVs is impacting global oil demand.

The Rise of EVs and Its Impact on Global Oil Demand

By the end of 2024, the global electric car fleet reached nearly 58 million, more than triple the number in 2021. These EVs now make up about 4% of the global passenger car fleet.

The trend is strongest in China, where roughly 1 in 10 cars is electric. In Europe, the ratio is 1 in 20, but growing fast.

The UK, the second-largest car market in Europe, saw EVs take nearly 30% of new car sales in 2024. This rise was driven by the new Vehicle Emissions Trading Scheme, which required 22% of new car registrations to be battery electric or hydrogen fuel cell models.

With flexible credit borrowing allowed, manufacturers achieved nearly 20% EV sales. Norway led with near-total electrification. 88% of new cars sold were fully electric, and another 3% were plug-in hybrids.

As a result, Norway’s oil demand from the road fell 12% from 2021 to 2024. Denmark also saw a big jump, with EVs reaching 56% of new car sales in 2024 and nearly 100,000 units sold.

Meanwhile, Denmark is also seeing strong progress. In the latest figures, the share of electric cars jumped by 10 percentage points, reaching 56%, with nearly 100,000 EVs sold.

EV sales
Source: IEA

Oil Demand Drops as EV Fleet Grows Rapidly

Surge in EVs on roads came heavy on the oil industry. IEA says that electric vehicles slashed oil demand by over 1.3 million barrels per day (mb/d) in 2024.

It was a steep 30% jump from 2023, and the present figures are nearly equal to all the oil Japan currently uses for transportation.

Passenger cars and small vans classified as light-duty vehicles (LDVs) drive most of this shift. Today, they account for 80% of the oil displaced by EVs. By 2030, their share will slightly drop to 77% as electric trucks and buses gain traction.

This is because of the rapidly evolving batteries and stronger charging infrastructure, these heavy-duty vehicles will likely displace nearly 1 mb/d of oil within the decade.

EVs Cut Costs and Boost Energy Security

IEA analysts highlighted that even if global oil prices fall to $40 per barrel, EVs remain cost-effective especially with home charging. This way drivers can continue saving money by switching to electric vehicles.

In China, fast public charging costs about twice as much as charging at home. Yet, EVs still offer better fuel savings than gas-powered cars. As more people choose EVs, countries reduce their oil use and become less vulnerable to price shocks. This shift not only saves money but also strengthens national energy security.

Strong Policies Keep EV Adoption on Track

Although trade tensions, slow economic growth, and oil price drops may hurt overall car sales, these issues affect the market size more than the EV share. In China, steady government support and affordable EV prices continue to drive sales forward.

Meanwhile, in Europe, even though EVs cost more than traditional cars, long-term policies and past crisis responses help keep the market moving.

Additionally, Norway planned to raise taxes on traditional internal combustion engine (ICE) cars and plug-in hybrids (PHEVs) from April. This was meant to boost EV sales and help the country reach its goal of 100% zero-emission car sales by the end of 2025.

The 2025 EV outlook shows strong momentum. Despite economic uncertainty, EVs continue to grow thanks to smart policies, lower battery costs, and better infrastructure. As countries push for cleaner transportation, EVs are helping the world move toward a more sustainable, low-carbon future.

With over 58 million electric cars already on the road by the end of 2024—and more to come—the transition is well underway. This shift not only transforms the oil market but also puts the world on a clearer, more energy-secure path forward.

Global Oil Demand: What the Forecasts Say

We found the latest oil demand forecast in the International Energy Forum’s monthly comparative analysis of the oil market report. It highlights the following:

OPEC

OPEC expects oil demand to grow by around 1.3 million barrels per day (mb/d) in both 2025 and 2026. Almost all this growth will come from non-OECD countries, where demand is expected to rise by 1.2 mb/d each year. In contrast, OECD countries will see only a small increase of 0.1 mb/d annually.

EIA

The US Energy Information Administration (EIA) recently increased its 2025 forecast by 0.1 mb/d compared to last month. It now expects demand to rise by 1.0 mb/d next year. However, this is 0.4 mb/d lower than the estimate made in January 2025. For 2026, the EIA sees demand rising more slowly, by 0.9 mb/d.

IEA

The IEA has a more cautious view. It expects global oil demand to grow by 0.7 mb/d in 2025, even though OECD demand may fall by about 120,000 barrels per day. For 2026, the IEA sees demand increasing by 0.8 mb/d. According to its latest data, average yearly demand growth between 2022 and 2024 was just 0.3 mb/d.

oil demand
Source: IEF

To simplify it, the gap between the highest and lowest global oil demand forecasts is 0.6 mb/d for 2025 and 0.5 mb/d for 2026. These differences highlight the uncertainty that still surrounds future oil demand.

Furthermore, as electric vehicles gain popularity, governments are starting to feel the financial impact. Fuel taxes, which have been a key source of public funding for roads and transport, are shrinking. In 2022 alone, the global shift to EVs resulted in an estimated $9 billion drop in fuel tax revenues.

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