In Summary
- Climate targets are slipping away, but the green transition is not. The second edition of the Allianz Green Transition Tracker shows that global emissions continue to diverge from pathways aligned with the 2015 Paris Agreement goals, and limiting warming to 1.5°C appears increasingly out of reach. However, the gap between ambition and reality has further narrowed. Of the 65 countries assessed – responsible for 81% of global greenhouse-gas emissions – 56 have moved closer to their benchmarks. At the current pace, however, the world will not reach net-zero until 2064.
- Clean technologies continue to advance despite political headwinds and weakening climate commitments. In 2025, renewables ended coal’s century-long lead as the world’s largest source of electricity supply, accounting for 33.5% of global generation compared with coal’s 33.2% share. Of all new power generation, 99% came from renewables. This helped slow global greenhouse-gas emissions growth to 0.7%, down from 1.5% in both 2023 and 2024. This year, global emissions are expected to stagnate, with fossil-fuel CO₂ emissions projected to decline by around 0.5%. Higher fossil-fuel prices and increasingly competitive clean technologies are supporting electrification, with the EV share of new car registrations rising from 18% to 22% between Q3 2025 and Q3 2026. However, rising electricity demand, grid bottlenecks and policy uncertainty could slow progress, while AI and data centers could increase global emissions by around 0.6% by 2030. Despite these headwinds, a global emissions peak before 2030 remains within reach if clean-energy expansion continues to outpace demand growth.
- Progress is increasingly uneven across countries, with leaders pulling further ahead of laggards. Since the first edition, Progress Scores, which measure the distance to net zero targets, have improved by an average of 2.0 points, but countries in the top half of the ranking have gained twice as much as those in the bottom half (2.6 versus 1.3 points). Energy efficiency has improved most, while territorial emissions per capita have deteriorated on average. This reflects the broader global trend: since 2015, energy-related emissions have increased by around 10%, compared with 35% growth in GDP. Economies are becoming less carbon-intensive, but rising energy demand continues to offset much of the progress.
- The four biggest CO2 emitters show different developments: Europe leads but loses momentum, China and India show signs of a turning point, while the US stalls. European Union members account for four of the ten countries showing strongest improvements in the Tracker. Yet, EU emissions fell by just 0.2% in 2025, compared with average annual reductions of 4% previously, leaving the region on course to reach net-zero-aligned benchmarks only by 2057. The US gained just 1.2 points and remains in the bottom half of the progress ranking, with a 2.2% jump in emissions – a second consecutive increase – driven by coal-fired generation that grew by 13% amid rising electricity demand. China gained 2.3 points as emissions growth slowed to virtually zero, supported by rapid electrification, with EVs accounting for more than half of new car sales. India recorded a 4.5-point improvement, the seventh-largest in the Tracker, as renewable expansion, slower electricity demand growth and favorable weather helped reduce coal-fired generation by 2.9% and deliver the country's first emissions decline outside an economic contraction in 25 years. Colombia recorded the largest improvement (+16.5 points), driven by recovering hydropower generation, expanding solar capacity and declining energy intensity. Meanwhile, fossil-fuel-dependent economies in the Middle East remain near the bottom of the rankings, reflecting high per-capita emissions and continued reliance on hydrocarbons.
- The next phase of the transition depends as much on grids and storage as on renewable capacity. Global clean-energy investment is expected to rise by 6.5% to USD 2.2 trillion in 2026, despite a 3.6% decline (USD25bn) in spending on renewable generation. Investment in electricity grids and battery storage will soar by 21% and 36%, respectively, as countries seek to integrate renewables and meet rising electricity demand. Battery-storage additions have surged from 2 GWh in 2015 to more than 300 GWh in 2025 as installed costs dropped 91%.
- Carbon removal is essential, but deployment has to be sped up. With a temporary overshoot of 1.5°C increasingly likely, removing CO₂ will be critical to offset residual emissions and eventually lower atmospheric concentrations. Yet the scale-up gap is enormous: ambitious pathways call for around 9 GtCO₂ of annual removals by 2050, compared with less than 4 Gt implied by current national commitments. While nature-based solutions currently dominate, novel carbon-capture technologies remain at an early stage and scaling them to a required level could cost USD0.5-1.4trn annually. Delaying emissions cuts by a decade could increase removal needs by more than 50% by 2100, reinforcing that avoiding emissions in the first place must remain the priority, with carbon removal complementing rather than substituting for rapid emissions reductions.