The energy transition will make firm progress in 2023

Significance

With shocks from the pandemic and invasion of Ukraine easing, this year will demonstrate how fast the transition can proceed in 'normal' circumstances. The United States, EU and China are all pursuing decarbonisation policies that advance global interests plus competing national interests.

Impacts

• Higher demand and protectionism will raise the cost of new energy systems such as solar and wind power, batteries and electric vehicles.
• Still-high fossil fuel prices, policy support, and improving performance and underlying cost declines will speed up clean energy adoption.
• EU and US approaches to cutting carbon emissions differ markedly, especially on carbon pricing use, and this will raise trade tensions.