Energy security returns as a top global priority
Over the past few years, energy security has abruptly resurfaced as a pressing priority, exposing critical structural weaknesses across global systems. The COVID-19 pandemic, Russia’s invasion of Ukraine, and trade restrictions on key commodities have severely disrupted international supply chains. As a result, energy has re-emerged as a fundamental pillar of national and economic security, reaffirming its pivotal role in international geopolitics.
In response to these pressures, decision-makers worldwide have enacted a surge of specialised energy regulations—a wave of state intervention that closely mirrors the sweeping policy measures adopted in the aftermath of the 1970s oil shocks.
Today, as this regulatory momentum accelerates once again, new strategic priorities have moved to centre stage alongside energy security, sustainability, and efficiency—most notably the cost of living, industrial competitiveness and supply-chain resilience. Drawing on insights from the IEA’s State of Energy Policy 2026, this article examines how this evolving landscape is reshaping national strategies, exploring which measures have been implemented and where the global energy trajectory is now heading.
How past energy crises still shape today’s challenges
The oil crisis of the 1970s marked a historic turning point for global energy systems. Just five years later, the first energy-efficiency frameworks introduced in 1975 laid the foundation for more than 130 countries to implement minimum performance standards, with over 80% of global demand for cooling systems and industrial motors now governed by dedicated regulatory requirements. These swift and far-reaching policy responses enabled major economies to progressively reshape their energy architectures and—combined with subsequent market and technological shifts—pushed governments over the following decades to rely more heavily on renewables, nuclear power, targeted fuel-switching initiatives, and stringent performance regulations to strengthen resilience and diversify their supplier bases.
Today, these advances continue to shape energy policy worldwide. However, since last year, several shifts and emerging challenges have begun to influence the trajectory of global energy governance. Three developments stand out:
- Growing market concentration in clean-energy technologies. Governments are taking steps to address mounting risks in energy supply chains, as the largest supplier now accounts for more than 70% of global manufacturing capacity for many key components—including solar panels, batteries, and other clean-energy technologies. This concentration, further heightened by geopolitical frictions, has become a major strategic vulnerability.
- A more moderate near-term focus on emissions reduction. Compared with previous years, near-term energy policy shows a more tempered emphasis on emissions reduction, slowing the pace needed to meet 2035 targets. In 2025, many governments prioritised emergency measures, resulting in more relaxed efficiency and fuel-switching standards overall.
- Balancing short-term pressures with long-term structural shifts. Despite these challenges, countries continue to build on existing policy foundations shaped by past energy shocks. Many are working to reduce long-term dependence on oil and gas imports, curb exposure to fossil-fuel price volatility, and accelerate the shift to low-emissions alternatives. Today, 150 countries have active policies to advance renewable and nuclear deployment, 130 have energy-efficiency and electrification policies, and 32 have measures designed to strengthen supply-chain resilience.
Slower progress on efficiency and changing policy standards
Governments have sharply increased public spending on advanced clean-energy technologies, with investment rising more than ten-fold since 2021 and expected to remain high. Yet this effort has not fully offset the growing pressures on energy systems.
Over 130 countries maintain energy-efficiency or fuel-switching regulations, though several were revised, delayed, or withdrawn in 2025. Global energy intensity has improved by about 30% since 2000—meaning the world uses one-third less energy per unit of economic output—but the pace of progress has slowed from 2.2% in the early 2010s to 1% in 2024, alongside weaker industrial value-added growth.
Minimum energy performance standards (MEPS) and fuel-switching policies continue to play a crucial role by giving industry long planning horizons to develop and deploy more efficient technologies. In 2025, MEPS adjustments took effect in 15 countries—some tightening requirements, others relaxing them. Most changes leaned toward reduced stringency, with notable examples including:
- The United States, where the One Big Beautiful Bill Act removed corporate average fuel economy civil penalties and the Department of Energy repealed earlier conservation standards for selected appliances;
- Revisions to the United Kingdom’s phase-out plans for gas boiler installations;
- Canada’s pause of the 2026 zero-emission vehicle mandate;
- The Eurasian Economic Union’s decision to delay MEPS for energy-consuming devices and industrial motors from 2025 to 2028.
These adjustments did not immediately reduce efficiency levels, but they did ease pressure on manufacturers. At the same time, MEPS for industrial heat pumps, compressors, and motors continued to advance beyond prevailing standards, signalling ongoing progress in specific segments.
Uneven climate pledges and insufficient emissions reductions
As these policy shifts take shape, attention is increasingly turning to how countries are upholding their climate pledges and long-term decarbonisation commitments.
Although 47 countries have set new near-term targets broadly aligned with the reduction rates implied by their long-term net-zero goals, only around 130 of the 194 Parties have submitted updated NDCs. The European Union, for instance, has proposed a 66–73% emissions reduction by 2035 relative to 1990 levels—consistent with its 90% target for 2040 and its 2050 net-zero objective—while Japan aims for a 73% reduction relative to 2013 levels. Others, including the United States, have withdrawn or not yet submitted revised pledges.
Coverage remains particularly limited in regions responsible for a large share of emissions: North Africa and the Middle East, for example, still lack comprehensive NDCs despite accounting for 85% and 45% of regional emissions respectively. Most emerging markets and developing economies pledge reductions relative to faster baseline growth, implying a net increase in energy-sector emissions over the next decade.
Reflecting these dynamics, the IEA projects that global energy-related CO₂ emissions will continue to rise by around 0.4% per year from 2024 to 2035. If all current commitments were fully implemented on time, emissions could decline slightly—by about 0.3% annually—but this would still represent a slower pace of abatement than in previous pledge cycles, which envisioned annual reductions of 1% to 2030 and 5.5% to 2035 for advanced economies. As a result, the energy component of current NDCs remains misaligned with the trajectory required to limit global temperature rise to 1.5°C by the end of the century.
New measures to strengthen energy security and diversify supplies
Against this backdrop of uneven climate ambition and persistent emissions growth, governments have expanded the tools used to safeguard energy security, complementing traditional emergency stockpiles of oil and natural gas with broader measures to buffer supply shocks. Most importing countries now operate formal emergency stockpiling systems, and energy security has once again become a central pillar of policy-making. Natural gas security measures, in particular, have multiplied over the past decade. Following Russia’s full-scale invasion of Ukraine in 2022, the EU further strengthened gas security legislation frameworks through the Gas Storage Regulation, raising minimum storage fill levels from 80% to 90% each November and tightening demand-restraint protocols. Other regions have similarly moved toward gas stockpiling policies to mitigate exposure to geopolitical disruptions.
At the same time, long-term policy efforts have focused on diversifying both energy mixes and supplier bases, reflecting what policymakers often describe as the “golden rule” of energy security. As a result, almost all advanced economies are now classified as having moderately or highly diversified energy supplies, largely due to the expanded role of natural gas, renewables and nuclear power. Global efficiency improvements have also been substantial: since 1970, the world economy has grown fivefold while using only three times more energy. Emerging markets and developing economies remain less diversified overall, though the share of countries with low diversification has fallen from nearly 80% in 2000 to around 65% today. This diversification imperative increasingly extends beyond fuels to the technologies and materials underpinning clean-energy systems.
Critical minerals and clean-tech supply chains under pressure
Critical mineral supply chains—highly concentrated in a handful of countries—have become a major policy concern.
China accounts for more than half of global refining capacity for lithium (70%), cobalt (78%), graphite (96%) and rare earths (91%), and 11 of the 20 minerals most essential to the energy sector were subject to export controls as of 2025.
In response, governments have introduced new standards, trade measures and incentive schemes to expand domestic processing capacity, secure alternative suppliers and reduce exposure to concentrated supply chains. For example:
- Japan allocated USD 6 billion in 2023 to diversify supply sources and build domestic production bases.
- The United States established a ten-year price-floor commitment in 2025 to support rare-earth magnet manufacturing.
- Australia has also advanced diversification through its Critical Minerals Development Programme.
Similar efforts are emerging in clean-technology manufacturing, where production remains highly concentrated:
- China accounts for over 70% of key components for batteries, solar PV and wind turbines—including blades, nacelles, cathodes and anodes—levels of concentration exceeding those historically seen in traditional energy commodities.
- The United States, despite rollbacks of some Inflation Reduction Act provisions, increased manufacturing tax credits for semiconductors from 25% to 35%, extending eligibility to inverters and batteries.
- Canada’s manufacturing tax credits have similarly supported renewable, nuclear and low-emission vehicle components.
Government spending to strengthen domestic supply chains has surged: financial incentives for clean-tech manufacturing reached USD 24 billion in 2025, doubling in less than a year and representing 12% of global investment in clean-technology manufacturing.
More than 120 countries have now implemented trade measures affecting clean-energy technologies, with 45 new measures introduced in 2025 alone—including Brazil’s increase of PV module tariffs from 9.6% to 25%. These developments form part of a broader reassessment of global tariffs, where clean-energy equipment is increasingly one element within wider trade policy adjustments.
Electrification advances, but not fast enough for 2030 goals
As universal electrification remains a central pillar of global development agendas, governments have intensified efforts to expand electricity access—yet progress still falls short of what is needed to meet the 2030 goal.
Around 60% of the global population without electricity access now live in countries that have recently strengthened their policy frameworks, with 56 new measures introduced since 2024. Political attention to electrification remains high, yet current policies are still insufficient to deliver universal access by 2030. In 2025, 29 countries refined their targets through the Energy Compacts agreed at the African Energy Summit in Dar es Salaam.
Fiscal tools such as tax incentives and exemptions from import duties are increasingly used to reduce upfront costs and support decentralised solutions. Electrification programmes backed by public-private partnerships and concessional finance are accelerating progress, especially in rural and peri-urban areas. Around 70% of those without electricity live in countries operating such programmes, including Kenya, which in 2024 expanded funding for its Kenya Off-Grid Solar Access Project to reach underserved counties.
Industrial Decarbonisation and Expanding Policy Frameworks
Industrial energy demand and emissions have remained structurally high, respectively 38,5% and 43,8% in 2024, prompting governments to tighten carbon pricing rules (increased significantly in coverage and stringency in 2025) and expand support for advanced manufacturing, considering that this sector accounts for 6% of total energy sector government.
As industrial decarbonisation gains strategic importance, over 60 jurisdictions have strengthened their industrial strategies with energy-related components, tightening regulations and expanding carbon pricing schemes. In 2025, seven countries updated their frameworks, reflecting rising ambition across the sector.
Carbon pricing coverage grew sharply in 2025: more than half of global industry-related emissions are now subject to an ETS or carbon tax, up from 15% the previous year. China drove the largest expansion by adding cement, steel and aluminium to its national ETS — sectors where waste-heat-to-power solutions such as Exergy International’s Organic Rankine Cycle (ORC) systems are already being deployed to cut process emissions by converting residual industrial heat into electricity.
Yet stringency remains limited, as most systems still rely heavily on free allowances to prevent carbon leakage—keeping effective prices near USD 1/tCO₂. To address this, the United Kingdom and the European Union have introduced carbon adjustment mechanisms that will gradually phase out free permits from 2026–2027. Additional schemes are scheduled in Japan, Türkiye, Brazil and India, which plans to convert its Perform, Achieve, Trade programme into a full carbon credit system covering nine industrial sectors.
Government incentives for clean-tech manufacturing have also accelerated. Support for domestic production of energy-related equipment—batteries, solar PV modules, heat pumps and industrial decarbonisation technologies—has surged from USD 1.9 billion in 2021 to USD 24 billion in 2025.
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Major allocations include the United States‘ advanced manufacturing credits (USD 4.2 billion), Japan‘s battery supply chain resilience programme (USD 2.7 billion), and France‘s 2030 industrialisation plan (USD 1.2 billion). The European Union‘s Clean Industrial Deal adds more than USD 100 billion to support clean-technology manufacturing through 2030. Spending often exceeds initial budgets: Canada‘s Clean Technology Investment Tax Credit disbursed five times its planned allocation, and India‘s PLI scheme for advanced battery storage overshot its budget eightfold.
In 2024, manufacturing incentives accounted for more than 60% of total industrial energy spending, reaching 90% in the United States and Canada. In Brazil and China, most funding targeted mining and critical minerals, reflecting the growing importance of securing diversified supply chains for clean-energy technologies.
Power sector shifts toward market-based tools and new energy policies
The power sector remains the largest recipient of energy-related government spending, but policy approaches are increasingly shifting away from direct subsidies toward more market-based mechanisms. In 2025, government support for the sector totalled around USD 135 billion—roughly 30% of all energy-related spending—yet many countries continued phasing out traditional feed-in tariffs and tax credit schemes for new renewable projects. Not every efficiency gain in the power sector depends on new subsidies. Waste-heat-to-power technology lets existing industries and power stations recover exhaust heat from their processes that would otherwise be lost and convert it into additional electricity, without new fuel input. Exergy applies its Organic Rankine Cycle systems to this kind of recovery in gas and oil-fired power generation, adding output and lowering the effective carbon intensity of existing plants rather than relying on new market mechanisms alone.
Renewable power procurement is now dominated by auctions and bilateral contracts. According to the IEA’s Renewables 2025 outlook, these market-based mechanisms are expected to account for nearly 60% of gross capacity additions between 2025 and 2030, compared with less than 25% in the previous year’s outlook. China led the shift: its new Energy Law and feed-in tariff reform eliminated fixed tariffs, reducing renewable price subsidies from USD 48 billion in 2022 to USD 18 billion in 2024. Europe has followed a similar trajectory, with auctions and private contracting replacing feed-in tariffs. In the United Kingdom, contracts for difference have supported renewable deployment since 2016, reaching an estimated USD 56 billion in 2025. In the United States, federal tax incentives for new solar and wind projects will be phased out for projects built after July 2026 or entering operation after December 2027.
This shift toward auctions and long-term contracts increasingly rewards generation that can be relied on around the clock, not only capacity that is cheapest to build. Geothermal power fits that profile, since unlike solar and wind it runs continuously. Exergy’s geothermal portfolio, built on its Radial Outflow Turbine technology, spans 34 plants and around 550 MWe installed, which the company describes as the second largest geothermal binary fleet in the world. A recent example is Exergy’s revamp of the Ribeira Grande geothermal plant in the Azores, where two existing units were replaced with a new 5 MW ORC system.
Government support for nuclear energy is also rising. Since COP28, more than 30 countries have committed to integrating nuclear power into national planning and tripling global nuclear capacity by 2050.
Carbon pricing coverage in the power sector remained stable in 2025, with 59% of global power-related emissions now priced. This share could reach 70% by 2030 as new programmes come online. Türkiye’s 2025–2027 Medium Term Plan established the legal basis for a national ETS with full compliance by 2027. Brazil’s Greenhouse Gas Emissions Trading System entered into force in late 2024 and began its first phase in 2025, while Morocco announced the introduction of a carbon tax in its 2026 Finance Law.
Efficient technologies and waste-heat recovery as key pillars of future energy systems
As global energy governance adapts to rising security concerns, supply chain pressures and uneven climate ambition, countries are increasingly turning to diversified and technologically advanced solutions to stabilise their energy systems. The policy acceleration seen since 2024—spanning emergency stockpiles, expanded carbon pricing, clean-tech manufacturing incentives and renewed electrification efforts—highlights a shared recognition that long-term resilience depends not only on fuel diversification but also on domestic efficient, low-emission industrial technologies.
Within this shift, industrial efficiency and waste-heat recovery have become essential components of national strategies. Technologies such as Organic Rankine Cycle (ORC) systems and high-temperature industrial heat pumps offer governments and industries a practical way to reduce exposure to volatile fuel markets while cutting emissions from hard-to-abate sectors. Solutions like Exergy’s ORC and X-Heat platforms, already deployed in energy-intensive industries, support compliance with expanding ETS frameworks, lower operational costs, and strengthen supply chain resilience by reducing dependence on imported fuels.
As countries prepare for the next cycle of climate commitments, these technologies will play a central role in aligning energy security with decarbonisation. The coming decade will require balancing immediate pressures with structural transformation—but the direction is clear: advanced industrial electrification and waste-heat recovery are now foundational pillars of modern energy policy, and companies capable of delivering reliable, scalable solutions will be key partners in building a more resilient global energy system.
