By Mark Jaffe, EUCI energy writer
While having made progress on deploying clean technologies, global efforts to meet 2030 decarbonization targets – set as part of the 2016 Paris Agreement – are falling short and new initiatives are wavering, according to a McKinsey & Company analysis.
“The energy transition shows signs of slowing momentum – at precisely the time it needs to speed up if targets are to be met,” the analysis said.
“Progress on the most demanding challenges, including those related to hydrogen and decarbonizing steel, has been hampered by project cancellations, slow technological progress, and policy shifts,” McKinsey said.
Seventy-seven percent of global economies have net-zero targets, either proposed or legislated, but few will hit their 2030 milestones to reduce greenhouse gases linked to a warming climate.
There are bright spots. Deployment of solar panels, batteries, and electric vehicles (EVs) have increased as has the supply of critical minerals as new facilities come online.
“But progress in other areas – notably, decarbonizing heavy industries, scaling hydrogen, and capturing carbon – is largely stuck,” the analysis said. “Of the seven domains of the energy system we track, three are progressing and accelerating, but four are not.”
Despite the progress and decarbonization commitments in the last 10 years, global emissions have still risen 9 percent since 2015 – a 3.3 gigaton increase.
McKinsey estimates that less than 15% of the low-emissions technologies required to meet the 2050 Paris targets have been deployed, “only a few percentage points higher than two years ago.”
Prospects are now jeopardized by a shifting geopolitical environment with some countries directing more of their resources to defense budgets and compounded uncertainty from tariffs leading to inefficient global supply chains.
For example, European NATO defense spending stood at an average of 2.2% of GDP in 2024 – a 38% increase.
“Not only is the priority landscape shifting, but the geopolitical environment is also now more unpredictable, which could impact the pace of the energy transition significantly,” the McKinsey analysis said.
The analysis looked at the deployment of nine clean technologies in three regions: China, Europe, and the United States.
In China, greenhouse gas emissions are still rising, up 21% between 2015 and 2024, mainly due to industrialization and increased GDP per capita.
Emissions in Europe and the United States have decreased by 18 percent and 8 percent, respectively, during the same period.
In the United States, the reductions have been helped by clean air laws that led to coal plants being replaced with cost-effective gas power generation and renewables.
“However, since 2024, rising electricity demand has required additional supply, which has largely been met with gas and coal generation,” McKinsey said. “As a result, despite growth in renewables, power sector emissions remained relatively flat in 2024.”
Part of Europe’s emissions decline, notably in 2021 and 2022, is due to lower industrial output.
In January 2025, the United States withdrew from the Paris Agreement and other countries are scaling back or extending their targets. The Dutch government, for example, announced a reduction in its offshore wind commitments.
The Dutch cut theirs target for offshore wind to between 30 and 40 gigawatts (GW) from 50 GW because of rising costs and lower-than-expected electricity demand from industry.
The report looked at investments in nine technologies: offshore wind, onshore wind, solar photovoltaics (PV), nuclear, battery storage, sustainable fuels, hydrogen, electric vehicles, and carbon capture with storage.
Looking at projects that have been built or received “final investment decisions” (FID), the McKinsey analysis found gaps across the board for all three regions, although investment has ramped up considerably in China.
For example, in Europe, there is a 31% gap between built and FID offshore wind projects and the targets for 2030 and 44% gap in solar investment. The region does have its targeted amount of nuclear.
The United States has a 44% gap for onshore wind, a 54% gap for solar PV, and a 77% gap for battery energy storage systems.
“Solar PV continues to be the success story of the energy transition,” the analysis said. “Although Europe and the United States currently lack enough announced capacity to meet their 2030 targets, the ease of build-out suggests that these targets will still be met.”
China has hit its 2030 target for combined wind and solar installations ahead of schedule, approximately 1.2 terawatts.
In all three regions, the investment in hydrogen technologies and sustainable fuels has been a fraction of the target goals, and only the United State has made investments in carbon capture technology.
“In 2024, global renewable capacity increased by 15% compared to the previous year, rising by 585 GW, and EV sales increased by 25% to around 17 million units sold worldwide.,” the McKinsey analysis said.
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