Methane emissions from the global energy sector remain stubbornly high, with no clear signs of decline, even as countries ramp up climate commitments. A new report by the International Energy Agency warns that closing this gap could not only curb warming but also significantly ease global gas shortages.

Released as part of the Global Methane Tracker 2026, the analysis shows that tried-and-tested measures could unlock up to 200 billion cubic metres (bcm) of natural gas annually—a volume that could reshape supply dynamics during a time of geopolitical strain.

Methane emissions plateau despite rising commitments

Despite pledges now covering over half of global oil and gas production, methane emissions from fossil fuels remained near record highs in 2025. The report highlights a widening “implementation gap” between ambition and actual reductions.

Around 70% of emissions are concentrated in just 10 countries, underscoring how targeted action could deliver outsized results. At the same time, performance varies drastically, with the most efficient producers emitting over 100 times less methane than the worst performers.

Energy crisis sharpens urgency

The urgency is heightened by ongoing disruptions in global energy markets, particularly the near-closure of the Strait of Hormuz, which has cut close to 20% of global LNG supply.

The IEA estimates that 15 bcm of gas could be made available quickly through existing methane abatement measures in key exporting and importing countries. Over time, broader action could deliver nearly 100 bcm annually, with another 100 bcm unlocked by eliminating non-emergency gas flaring.

“This is not only a climate issue,” said Tim Gould. “There are also major energy security benefits that can come from tackling methane and flaring, especially at a time when the world is urgently looking for additional supply amid the current crisis.”

Low-cost solutions within reach

The report emphasises that around 70% of methane emissions—roughly 85 million tonnes—can be reduced using existing technologies. Notably, over 35 million tonnes could be avoided at no net cost, making methane abatement one of the most cost-effective climate actions available.

A major share of emissions—about 80% in oil and gas—comes from upstream operations, making this a critical focus area for policymakers.

Coal sector under scrutiny

Experts say the coal sector remains a blind spot in global methane mitigation efforts.

“Coal, one of the biggest methane culprits, is still being ignored,” said Sabina Assan of Ember. “There are cost-effective technologies available today, so this is a low-hanging fruit for tackling methane. We can’t let coal mines off the hook any longer.”

India and other major emitters need sharper focus

For countries like India, the report and accompanying expert commentary point to an urgent need to prioritise methane from coal mining—an area often overlooked in climate strategies.

“Methane emissions from coal mining have not received enough attention,” said Rajasekhar Modadugu. “Major coal mining countries, including India, should focus on existing technologies and the feasibility of capturing or eliminating these emissions.”

Satellites and policy frameworks gaining traction

The report also highlights the growing role of satellite monitoring in identifying large methane leaks, alongside new frameworks developed with international bodies to help governments respond more effectively.

With improved data transparency and emerging markets for low-methane fuels, the IEA suggests the groundwork is already in place. The challenge now lies in execution.

As Gould put it, “Setting targets is only a first step—real progress depends on policies, implementation plans and concrete action

When the Strait of Hormuz was disrupted in 2026, a return to coal seemed inevitable. Instead, renewable energy filled the gap—revealing a deeper shift in how the world responds to energy crises.

When the Strait of Hormuz was blocked in early 2026, the world braced for an energy crisis. The narrow waterway is one of the most critical routes for global fuel transport, carrying nearly 19% of the world’s liquefied natural gas. As shipments were disrupted, a familiar expectation took hold: countries would fall back on coal.

That assumption was rooted in history. In previous crises, when gas supplies became uncertain or expensive, coal often filled the gap. This time, many expected the same pattern to repeat.

But it didn’t.

According to an analysis by the Centre for Research on Energy and Clean Air (CREA), global fossil fuel power generation fell by around 1% in March 2026 compared to the previous year. Gas-fired power dropped more sharply, by 4%, while coal generation remained largely flat.

Hormuz Crisis and Clean Energy Shift

The CREA analysis, which draws on near-real-time electricity data covering major power markets including China, the United States, the European Union, and India, represents around 87% of global coal power and over 60% of gas power. In the context of a global disruption, even a modest decline signals something more structural: the expected “return to coal” did not materialise.

The explanation lies in a shift that has been building quietly over the past decade—the rapid expansion of renewable energy.

In March 2026, increases in solar and wind played a decisive role in offsetting the drop in fossil fuels. Solar generation rose by 14%, while wind increased by 8%, with hydropower also contributing modest gains. Together, these sources absorbed the shortfall without pushing systems back toward coal.

“The record growth in global clean power generation, particularly solar and wind, has helped ease the impact of the latest fossil fuel crisis,” said Lauri Myllyvirta, Lead Analyst at CREA. “The increase in clean electricity offset the fall in gas-fired power generation following the Hormuz blockade, preventing a jump in coal-fired power generation.”

Outside China, coal-fired generation fell by 3.5%, while gas declined by 4%. Major economies—including the United States, India, the European Union, Turkey, and South Africa—recorded reductions in coal-based electricity. This directly challenges the long-standing assumption that fossil fuels serve as the default backup during crises.

The scale of renewable growth helps explain why.

In 2025 alone, the world added roughly 510 gigawatts of solar capacity and 160 gigawatts of wind. These additions are expected to generate about 1,100 terawatt-hours of electricity annually. By comparison, all the natural gas transported through the Strait of Hormuz in 2025 could produce around 590 terawatt-hours—roughly equivalent to France’s total power generation.

In effect, the renewable capacity added in a single year now produces nearly twice the electricity linked to one of the world’s most strategic fossil fuel routes. The implications are structural, not temporary.

Further evidence comes from coal transport. Seaborne coal shipments fell by 3% in March 2026, reaching their lowest levels since 2021. China and India, the world’s largest coal importers, saw a 9% drop in shipments, while countries such as Turkey and Vietnam also recorded declines.

Coal did not step in to fill the gap, in part because it could not. In many markets, coal plants were already operating near their maximum capacity. With coal already heavily utilised—often because it had been cheaper than gas—there was limited room to increase output further.

Gas, by contrast, typically serves as a flexible buffer in power systems. When gas supplies were disrupted, that flexibility was constrained. Renewable energy, rather than coal, filled the resulting gap.

At the same time, rising fossil fuel prices have strengthened the economic case for clean energy, discouraging new investment in coal.

This pattern has precedent. When Russia reduced gas exports to Europe, there were similar fears of a coal resurgence. While coal use rose briefly, the longer-term response was an acceleration of renewable deployment, leading to a sustained decline in emissions. The Hormuz disruption appears to be reinforcing that trajectory rather than reversing it.

At the country level, the trend is largely consistent. The most significant declines in coal power generation were recorded in the United States, India, South Africa, Turkey, Germany, and the Netherlands. In many cases, the expansion of solar power was the primary driver, supported by improvements in hydropower and nuclear generation.

There were exceptions. Japan and South Korea saw increases in coal use due to weaker nuclear output, while parts of coastal China temporarily shifted from gas to coal amid high gas prices. Even so, overall coal generation in China remained below 2024 levels, underscoring the broader direction of change.

The crisis has also triggered policy responses aligned with long-term transition goals. France is accelerating electrification across key sectors. Egypt plans to add 2,500 megawatts of renewable capacity. India has announced annual bids for 50 gigawatts of renewable energy. Indonesia is pursuing a 100-gigawatt solar vision, while Turkey has pledged $80 billion in renewable investments by 2035. Vietnam, meanwhile, is planning to phase out coal-fired plants in new energy projects after 2030.

These moves suggest that the response to disruption is not a return to older systems, but a faster shift toward new ones. The findings from CREA point to a deeper transition already underway—one in which clean energy is no longer supplementary, but central to energy security.

For decades, fossil fuels were seen as the backbone of energy security—reliable, scalable, and indispensable during crises. That assumption is now being tested. Renewable energy is increasingly demonstrating its ability to stabilise supply during periods of disruption.

The idea of a “coal comeback” may have made for compelling headlines, but the data tells a different story. Instead of turning back, the global energy system appears to be moving forward.

The Hormuz crisis may ultimately be remembered not as a moment of regression, but as an inflection point—one that revealed how far the transition to clean energy has already progressed, and how it may accelerate in the years ahead.

India’s energy transition is often framed as a technological leap—a race to install solar panels, wind turbines, and battery storage at unprecedented scale. But beneath this visible transformation lies a quieter, more decisive battleground: finance.

A new analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) suggests that India’s ambition to reach 500 GW of renewable capacity by 2030 and 60% non-fossil fuel energy in its overall mix by 2035 will depend less on engineering breakthroughs and more on how effectively the country mobilises capital.

The Scale of India’s Energy Transition

The numbers alone reveal the magnitude of the challenge.

Annual investments in renewables, storage, and transmission are projected to rise from around $68 billion by 2032 to $145 billion by 2035—more than doubling within just three years.

This is not just an infrastructure expansion; it is a financial transformation. Renewable assets are capital-intensive and long-lived, requiring stable, long-term funding mechanisms rather than short-term capital flows.

“The power sector is already among the largest borrowers in India’s domestic debt markets, and this role is likely to expand as investments accelerate. In this context, transition planning is, fundamentally, a question of debt market planning. The availability, tenor and cost of debt will decide how fast capacity can be added — and who gets left behind,” says Kevin Leung, Sustainable Finance Analyst, Debt Markets, IEEFA – Europe, and a contributing author of the report.

India’s Energy Transition: A Structural Shift in Power Economics

What makes this transition particularly complex is that it is not occurring on a level playing field.

The report finds that financial markets are already structurally favouring renewable energy over thermal power. Renewable platforms benefit from zero fuel costs, stronger margins, and greater access to global capital. Thermal assets, by contrast, are increasingly being pushed out of international financing channels.

This divergence is visible even within the same corporate groups.

“Adani Green Energy Limited consistently outperforms Adani Power on EBITDA margins within the same corporate group. Similarly, NTPC Green outperforms NTPC’s legacy thermal operations. These are not cyclical differences. They reflect a structural shift in the economics of power generation that will compound over time as renewable portfolios mature and generate stable, contracted cash flows,” says Soni Tiwari, Energy Finance Analyst at IEEFA.

The implication is clear: the transition is not just about adding clean capacity—it is about a reallocation of financial power within the energy sector.

Energy Security Meets Geopolitics

India’s urgency is shaped not only by climate goals but also by geopolitical realities.

The country remains heavily dependent on imported fossil fuels, including crude oil and liquefied natural gas. This dependence exposes the economy to global price shocks and supply disruptions, making the transition to domestic renewable energy a question of national energy sovereignty.

In this context, clean energy is no longer just an environmental imperative—it is a strategic necessity.

The Debt Market Bottleneck

Despite the scale of required investment, India’s financial system is not yet fully equipped to support the transition.

While the country’s corporate bond market saw issuances exceeding $500 billion in 2025, it remains relatively shallow and dominated by public sector entities. Power utilities still rely on loans for nearly 80% of their debt, indicating a limited role for bond markets.

This imbalance creates a structural constraint. Renewable energy projects require long-term, low-cost financing—conditions that bond markets are typically better suited to provide.

At the same time, over-reliance on international capital introduces new vulnerabilities.

Global capital flows can be volatile, particularly during periods of geopolitical instability. Sudden capital withdrawals could disrupt funding for large-scale energy projects, creating what analysts describe as a “transition investment flight risk.”

The NTPC Factor

At the centre of this financial ecosystem stands NTPC, India’s largest power utility.

With a planned capital expenditure of ₹7 trillion (around $80 billion) through FY2032 and a credit profile aligned with sovereign ratings, NTPC is uniquely positioned to anchor the transition.

“It is uniquely positioned to anchor large-scale, low-cost financing for the power sector’s shift to clean energy. NTPC’s INR7 trillion (USD80 billion) capex plan through FY2032 makes it the single most consequential capital allocator in the sector. If NTPC can demonstrate credible transition to a clean energy company, it would facilitate broader capital flows via a coherent transition finance agenda alongside other catalytic efforts,” says Saurabh Trivedi, Lead Specialist at IEEFA.

The company’s trajectory could shape not just its own future, but the financial architecture of India’s energy transition.

Winners, Losers, and the Transition Divide

The report also highlights an emerging divide within the power sector.

Stronger, well-capitalised companies—particularly those with renewable portfolios—are likely to benefit from easier access to finance. In contrast, financially constrained players face a dual challenge: limited ability to invest in decarbonisation and shrinking access to funding.

State-owned enterprises, backed by implicit government support, enjoy greater refinancing flexibility. Private players without such backing may struggle to keep pace.

This creates a risk of asymmetric transition, where only certain segments of the industry are able to adapt effectively.

A Financial System in Transition

Ultimately, the energy transition is not just about replacing fossil fuels with renewables—it is about reshaping the financial system that underpins the energy economy.

Building a resilient, domestically anchored capital base—supported by pension funds, insurers, and long-term institutional investors—will be critical. Without it, India risks remaining dependent on volatile global capital flows.

At the same time, expanding the role of bond markets could unlock new pathways for financing large-scale infrastructure.

Beyond Technology: The Real Transition

The narrative of India’s clean energy future often centres on megawatts installed and emissions reduced. But the deeper story is one of capital—how it is raised, allocated, and sustained over decades.

The IEEFA report makes one point unmistakably clear:India’s energy transition will not be won in power plants alone. It will be decided in balance sheets, debt markets, and financial institutions.

And as the required investment climbs toward $145 billion annually, the question is no longer whether India can build a clean energy system—but whether it can finance it.