As COP30 takes place in Belém, an inevitable question is: at what point is the energy transition?
New research from the McKinsey Global Institute offers an answer by examining the physical transformation at the heart of this transition. We found that the current stage is best characterized as a “story of many transitions.” And so leaders need a detailed, nuanced understanding to chart the path forward — especially as innovation, geopolitics, political shifts and the growing energy demand for data are reshaping the energy landscape.
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Let’s start with a bird’s eye view. Progress has been better than many imagined, but still too slow to meet the goals of the Paris Agreement.
By the end of 2024, on average, around 13.5% of all low-emission technologies needed for 2050 had been implemented. That was a few percentage points more than two years earlier.
But it was also roughly half of what is needed to keep warming “well below” 2°C.
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The devil is in the details. There is huge inequality in three main aspects — the many transitions.
First, so far, some parts of the energy system have moved quickly in terms of implementation, while others remain stuck in first gear. In three of the seven domains of the energy system, there is notable progress, generally where the goals of emissions reductions, favorable economics, and energy security converge.
For example, annual additions of low-emissions power generation capacity doubled between 2022 and 2024, reaching about 600 gigawatts. The momentum strengthened further in early 2025.
At this rate, the world could plausibly reach a “cruising speed” of approximately 1,000 gigawatts per year before 2030. This would be well in line with what is needed to meet the goals of the Paris Agreement.
In the mobility domain, by mid-2025, around one in four new passenger cars sold globally was electric. And the supply of critical minerals has grown rapidly.
But in the other four domains — buildings, carbon capture, hydrogen and industry — the story is far less encouraging. To date, there has been limited success in accelerating implementation, and the last three have barely gotten off the ground.
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Second, progress is also uneven across regions. China is the world’s largest emitter, but at the same time it has been responsible for about two-thirds of recent additions in solar and wind capacity, as well as electric vehicles.
And the role of other emerging economies is growing. In the first six months of 2025, India added 22 gigawatts of solar and wind power — more than the United States. This represented a new boost to implementation at a time when the US and European Union have slowed down in some areas.
Third, prospects for the future are also uneven. In 2024, we catalog 25 physical challenges related to the innovation and implementation of low-emissions technologies. This year, we found that there is a growing divide between challenges that were already considered easy and those that were more difficult.
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The easier challenges—like improving the range of passenger cars and using electricity for low-temperature heaters—are being solved. But many of the most difficult ones — and which need to be addressed to reduce around half of the energy system’s emissions — are not.
These include decarbonizing heavy industrial processes and deploying hydrogen efficiently.
For example, only about 10% of announced hydrogen projects reached final investment decision in 2024. And from 2024 until mid-2025, more than 50 hydrogen projects were cancelled, including those related to industries and fuels. The result is a huge gulf between paper announcements and practical reality.
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Therefore, some doors still appear to be closed. But at the same time, others are opening up, sometimes unexpectedly.
Advances in some electrification-based technologies — especially battery chemistries and high-intensity heater electrification — have expanded the boundaries of the possible, bringing these technologies to use cases like long-distance trucking and cement decarbonization.
Likewise, firm sources of clean energy, such as nuclear, geothermal and carbon capture gas, are receiving a boost from both public policy and growing demand from data centers.
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What should leaders do in the face of this story of many transitions?
The parts of the energy system where there is real momentum clearly offer opportunities. But advancing further will require disciplined execution to maintain the pace and accelerate it when necessary. Business leaders who anticipate the next bottleneck and position themselves early to remove it gain a competitive advantage.
In the most challenging areas where progress is stagnant, continuous innovation is the name of the game. And this is not just about the innovation of individual low-emissions technologies, but also how they work together and how markets are structured to support their expansion.
At the same time, companies need to be agile. This is a constantly evolving game, and it may happen that old concepts and approaches need to be abandoned in favor of new ways of thinking.
Overall, to chart an affordable, reliable and competitive path to reducing emissions, leaders need to accept that this transition is complex and dynamic. Developing the ability to deal with this complexity will make them more effective.
The opinions expressed in Fortune.com commentary articles are solely those of the authors and do not necessarily reflect the opinions and beliefs of Fortune.
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