- Ahead of the COP31 climate conference in Antalya, the second edition of the Allianz Green Transition Tracker finds that, overall, the world is progressing towards net zero, but far too slowly to meet global climate targets. The report, “The clean-tech turning point and why emissions could soon follow,” shows clean technologies beating back political headwinds, but failing to displace fossil fuels fast enough to limit global emissions in time to meet net-zero goals.
- Almost everyone is moving – but not fast enough
- The Tracker scores 65 economies, responsible for 81% of global greenhouse-gas emissions, on five indicators: carbon and energy intensity, consumption- and territorial-based emissions per capita and the low-carbon share of the power mix. Its Progress Score measures how far each country has come since 2015 toward its 2050 net-zero benchmark. This year, 56 countries improved their score by 2 points on average. But only about a third of countries have kept pace with their reduction pathways aligned with the Paris Agreement. Luxembourg, Denmark and Estonia top the Progress Score ranking, and all ten front-runners are European. Colombia posted the largest improvement (+16.5 points) thanks to a hydropower rebound and new solar capacity, while Gulf oil producers remain at the bottom.
- Almost every country is moving in the right direction. The problem is the speed. Given the current trajectory net zero will only be reached in 2064 - 14 years behind schedule. And the climate-policy gap is widening, with the leaders pulling further ahead while the laggards struggle to keep up.
- A two-speed transition
- Countries in the top half of the ranking gained 2.6 points on average, almost twice as much as those in the bottom half (1.3). The EU still leads (+2.2 points), but its emissions fell by just 0.2% in 2025 after annual cuts of 4% on average previously; at this pace, it would reach its benchmarks only in 2057. The US gained only 1.2 points and slipped to 41st in the Progress Score ranking as emissions rose for a second year and coal-fired generation jumped 13%. China (+2.3 points, 43rd) and India (+4.5 points, up five places to 45th) show signs of a turning point: China’s emissions growth slowed to virtually zero as battery electric vehicles approached half of new car sales, and India recorded its first emissions decline outside an economic contraction in 25 years.
- Power has turned green – and clean technology keeps getting cheaper
- In 2025, renewables – with a share of 33.5% – overtook coal (33.2%) as the world’s largest source of electricity for the first time in more than a century and supplied 99% of new generation, slowing global emissions growth to 0.7% from 1.5% in each of the two previous years. Falling costs are carrying the shift further: annual battery-storage additions surged from around 2 GWh in 2015 to 307 GWh in 2025 as installed costs dropped 91%, and the price gap between battery-electric and combustion-engine cars has narrowed from 49% to 20% since 2019. The next phase will be decided as much by grids and storage as by new capacity: clean-energy investment is set to rise by 6.5% to USD2.2trn in 2026, with grid spending up 21% and storage up 36%, even as investment in renewable generation dips.
- Geopolitics, not climate policy, determines prices
- Geopolitics is currently sending a stronger price signal than climate policy, driving up diesel prices and demand for electric vehicles. Allianz Research calculates that matching the Iran-conflict-related rise in diesel prices through carbon pricing alone would take a CO₂ price of more than EUR200 per ton. In the EU, battery-electric cars reached 30% of new registrations in September, up 11 percentage points in a year. However, a new round of fossil-fuel subsidies, which remain around 70% higher than they were before the 2022 energy crunch, poses a risk to Europe’s progress.
- Outlook: an emissions peak is within reach, but a sustained decline is not yet assured
- Allianz Research expects fossil-fuel CO₂ emissions to decline this year– even though the global economy is growing robustly. Cheaper clean technology and high fossil-fuel prices are the main tailwinds. Yet rising electricity demand and grid bottlenecks are the biggest near-term risks: AI and data centers alone could add around 0.6% to global emissions by 2030. High financing costs, trade barriers and policy uncertainty could slow the deployment of green technologies and throw into question the ability to reach peak emissions.
- Fossil-fuel CO₂ emissions could fall this year for the first time outside a recession, declining by around 0.5%, but that owes more to cheap clean technology and expensive oil than to stronger climate policy. A price shock is not a strategy. Governments should resist cushioning it with new fossil-fuel subsidies and instead lock in the shift with predictable carbon pricing and faster investment in grids and storage.