Energy transition progress is fragmenting and becoming increasingly uneven. In this year’s Energy Transition Index (ETI), only 24% of countries improved simultaneously across security, affordability and sustainability, while the enabling conditions that drive future progress, policy, finance, innovation and infrastructure have weakened for the first time in over a decade.

The headline numbers still impress. Global energy investment reached $3.3 trillion in 2025, renewables and nuclear generated 42% of electricity, and renewable energy capacity increased by nearly 800 gigawatts (GW).¹ Yet these gains sit alongside mounting constraints. Grid congestion, permitting delays, capital concentration and chronic underinvestment in emerging economies continue to slow delivery. Newer pressures are compounding these challenges: by late 2025 and early 2026, trade restrictions affected $2.6 trillion of global commerce, while export controls covered more than half of critical transition minerals. At the same time, finance, regulation and innovation weakened simultaneously, pointing to broader erosion in readiness.

The 2026 disruption to energy flows through the Strait of Hormuz brought these vulnerabilities into focus, triggering one of the most acute energy price shocks since 2022 and forcing import-dependent emerging economies into harder trade-offs between energy access, affordability and transition investment. The shock underscored a wider shift: energy security is no longer only about fuel supply, but also about grids, minerals, infrastructure, reliability and resilience.

System performance continued to advance, but security is holding it back. Sustainability advanced at a slower pace, however, with energy efficiency improving in 92 economies. Security was the only system performance dimension to decline (-0.9%), driven by weaker reliability and supply conditions. These declines predate the Hormuz disruption, which has demonstrated how quickly affordability gains can be reversed and has amplified systemic vulnerabilities that require structural remedies, not merely cyclical ones. Demand is also rising quickly, driven by electrification, cooling, digital infrastructure, AIenabled data centres and economic growth. Energy systems are being asked to deliver more, more reliably and cleanly, while already under strain.

Sweden leads the 2026 rankings for the third consecutive year, with Nordic and European economies anchoring the top 20. China, Brazil, the US, Germany and France also feature, showing that consequential transition countries span regions and income levels.

Transition readiness shows where the transition is heading, and in 2026, that trajectory turned negative. Finance and investment recorded the sharpest fall (-1.8%). The issue is not capital volume, but the conditions that determine where and at what cost it is deployed: 75% of clean energy investment still flows to a few economies, while countries expected to drive 80% of future electricity demand growth face financing costs two to three times higher.

Regulation and political commitment declined (-1.2%) as policy uncertainty rose and ambition outpaced delivery. Innovation also weakened (-1.1%), with slower diffusion in carbon capture, hydrogen and long-duration storage. This has widened the gap between what is being built and what systems can absorb: more than 2,500 GW of projects are awaiting grid connections worldwide. Record deployment alone cannot compensate when policy, finance, innovation and infrastructure weaken together.

Three priorities define the path forward:

1. Strengthen security, affordability and resilience

2. Unblock delivery by expanding infrastructure

3. Increase investability through stable policy, credible regulation and better risk-sharing

The window to strengthen foundations remains open, but it is narrowing, and the gap between those who act on it and those who do not is already visible in the data.