Countries plan fossil fuels expansion that could wreck climate targets

The world is on track to produce more than twice the volume of fossil fuels than is consistent with a 1.5-degree Celsius world by 2030, according to a new report.

Of the 20 large fossil fuel producing countries analysed, 17 of them plan on increasing production, and 13 plan on significant increases in gas production.

“The increase in fossil fuel expansion plans over the last two years is alarming. While many governments see renewables as key to their energy security, others are betting against the clean energy transition,” Olivier Bois von Kursk, a policy advisor at the International Institute for Sustainable Development and a coauthor of the report, said in a statement. “To avert the worst climate impacts with minimal economic disruption, governments need to commit to no new fossil fuels and back the clean industries of the future.”

The 2025 Production Gap Report, published by the Stockholm Environment Institute (SEI), Climate Analytics, and International Institute for Sustainable Development (IISD), analyses country-level plans to produce fossil fuels and estimates the misalignment, or “gap,” between those production levels and the 1.5 and 2-degree Celsius temperature targets at the heart of global climate ambitions.

Despite commitments to avoid breaching the 1.5-degree warming target, governments continue to extract coal, oil, and gas at rates that would push warming beyond that threshold.

Graph showing the production gap (Courtesy of the Stockholm Environment Institute, Climate Analytics, and the International Institute for Sustainable Development)

The researchers estimate that governments are set to produce 120 percent of the volume of coal, oil, and gas that would be aligned with the 1.5-degree Celsius target in 2030. That is actually a backtracking compared to the previous version of the Production Gap report, published in 2023. At that time, the world was only on course to produce 110 percent of what could be extracted by 2030.

As a result, to head off 1.5 degrees of warming, even steeper reductions would be required. “[T]hese deeper reductions will be harder and more expensive to achieve, as the result of further lock-in of fossil fuel infrastructure added in the 2020s,” the report warned.

“Ten years after Paris, renewables are way out in front of the pack. Instead of getting in the race, governments are blundering backwards towards our fossil past,” said Neil Grant, report co-author and senior expert at Climate Analytics, an international policy think tank. “While it’s frustrating seeing public money squandered on what will inevitably become stranded assets, it’s intolerably unjust to think about the human and environmental costs of these fossil expansion plans, especially for the most vulnerable.”

The United States is particularly aggressive in its attempts to roll back the clock. The Trump administration is forcefully supporting the expansion of oil and gas, and has recently gone so far as to propose ending the greenhouse gas reporting programme, which requires large polluters to report their emissions. The goal appears aimed at crippling the government’s ability to regulate greenhouse gas emissions.

Support for oil, gas, and coal is also direct. The U.S. government subsidizes the fossil fuel industry on the order of $34.8 billion each year, according to a recent report from Oil Change International.

But it isn’t just the United States. In Canada, the federal government has directly invested in oil and gas projects. In China, India, and Mexico, the government subsidizes or invests in state-owned energy companies. Even in Norway, the government has opened up new areas for extraction.

“While some countries profiled in the report have moved to reduce fossil fuel support, the majority continue to provide substantial financial support for fossil fuels, such as through direct investments in infrastructure, streamlining of environmental assessment and contracting procedures, providing tax incentives and credits, opening up new areas for exploration and development,” Emily Ghosh, a senior scientist at the Stockholm Environment Institute, told reporters on a press call.

“The fiscal cost of government support for fossil fuels remains near an all-time high,” the Production Gap report said.

The story is not all bad. The “ground is shifting,” Christiana Figueres, the former executive secretary of the UNCCC, said in a Foreword to the report. She pointed to the advisory opinion from the International Court of Justice that found that nations can be held legally accountable for their greenhouse gas emissions. As a result, plans to continue to extract fossil fuels beyond critical warming thresholds could violate international law.

Crucially, despite the backtracking in oil and gas producing countries, the rapid expansion of renewable energy and electric vehicles continues apace. China’s explosive adoption of clean tech has raised the prospect of a peak in fossil fuel demand and a peak in emissions in the near future.

More importantly, China’s green transition is a global phenomenon. China is now the leader in most clean tech sectors, and is exporting cheap green technologies to the entire world — except for the U.S. and some parts of Europe that are attempting to wall off Chinese products. But it is unlikely that tariffs and trade barriers in the West will derail the energy transition. Solar is now the cheapest form of electricity generation in most parts of the globe and China’s low-cost electric vehicles are now dominating the auto sector.

Think tank Ember says that we are in the midst of the “eletrotech revolution,” in which clean tech is more efficient, cheaper, and more secure than fossil fuels. A lengthy slidedeck details extensive evidence that the energy transition is not unfolding bit by bit, but is washing over the world at an exhilarating pace. The electrotech revolution is in its early stages, but it is undoubtedly underway.

The world now finds itself in a peculiar situation in which governments are supporting excessive fossil fuel production that risks blowing up emissions targets, but at the same time, the energy transition continues to march forward, and appears to even be accelerating.

“Fossil fuels are on their last legs and the industry knows it,” Figueres said.

(Writing by Nick Cunningham; editing by Sophie Davies)