Global efforts to improve energy efficiency stalled in 2025 as major economies chose to roll back or delay environmental regulations to ease immediate financial pressures on households and businesses. According to the authors of the newly released report, these regulatory retreats, particularly regarding vehicle fuel standards and home heating, have significantly slowed the expected pace of global efficiency gains through the end of the decade.
“Last year, regulatory rollbacks outweighed measures that increased stringency or coverage, with 30% of energy consumption under regulation experiencing some form of rollback, compared with 17% subject to new, stricter rules.” The report further notes that “the changes in 2025 marked a historic reduction in coverage and stringency, with significant withdrawals, relaxed legislation and postponements coming into force.”
In simpler terms, governments shifted their focus away from long-term energy-saving rules to help people deal with the rising cost of living. In many cases, this meant canceling penalties for car manufacturers who did not meet fuel economy targets or pushing back deadlines for switching from gas boilers to cleaner heating systems. While these moves might lower costs right now, they mean that cars and buildings will stay less efficient for longer, leaving people more vulnerable to future spikes in energy prices.
The report “State of Energy Policy 2026” was published by the International Energy Agency in France in April 2026. It was prepared by the World Energy Outlook team under the direction of Laura Cozzi, the IEA’s Chief Energy Modeller.
