Global natural gas demand returned to growth last year and hit a fresh record, serving as a wake-up call for the renewables expansion.

The recovery is notable as it highlights the cementing role of gas in the global energy system, even as renewables continue to grow. While wind and solar expanded by 16 per cent — nine times faster than overall energy demand — the growth didn’t fully counterbalance rising consumption needs.

“These trends underscore a stark truth: while renewable energy is scaling faster than ever, global demand is rising even faster,” the Statistical Review of World Energy stated. “Rather than replacing fossil fuels, renewables are adding to the overall energy mix.”

Asia and South and Central America saw the biggest regional advances in gas demand, but consumption also rose in Europe for the first time since 2021. While project developers vying to start supplying the world in the coming years will be encouraged by the news, it’s a bad sign for efforts to slow the speed of climate change.

Overall fossil fuel use rose by just over 1 per cent. Crude oil demand in OECD countries remained flat, while it rose in non-OECD countries.

Global gas production also increased last year, even as output in Europe continued to decline. China became the world’s fourth largest gas producer, behind the US, Russia and Iran. The nation’s domestic production now meets 56 per cent of its demand, helping to lower competition for liquefied natural gas. Egypt’s gas production, meanwhile, slumped 17 per cent from the previous year to the lowest since 2016, forcing it to make a dramatic return to imports.

While generation from renewables also rose, capacity additions of solar outpaced those of wind by four to one. The offshore wind industry is facing numerous challenges in Europe and elsewhere after costs rose to build projects and US President Donald Trump railed against their expansion.

“This year’s data highlights how Europe has been facing a reality check, with rising interest rates and supply chain costs slowing progress on renewables, while China and other emerging markets continue to drive growth at scale,” said Wafa Jafri, who leads Energy and Natural Resources Strategy at KPMG in the UK, in a statement for the review. “What’s emerging is not a uniform transition, but a disorderly one.”

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Published on June 26, 2025