Decarbonizing the Energy Sector: From NDC targets to net-zero implementation pathways

This deep dive summarizes the discussion that took place in the context of the event “Decarbonizing the energy sector: From NDC targets to net-zero implementation pathways” at the 2025 Global NDC Conference. The event was led by the United Nations Development Programme (UNDP), and co-organized with the International Energy Agency (IEA), and the International Institute for Sustainable Development.

Why Are NDCs Critical to The Clean Energy Transition?

The clean energy transition is accelerating, with renewables accounting for more than 90% of new global power installations in 2024. Yet the world is dangerously off track in meeting climate goals. Investment in clean technologies is rising, but it’s overwhelmingly concentrated in just a few countries and regions (e.g., China, United States, and the European Union), leaving much of the Global South behind. 

At the event “Decarbonizing the Energy Sector: From NDC targets to net-zero implementation pathways” at the 2025 Global NDC Conference, three messages became clear: 

1. decarbonizing the energy sector is not just part of the puzzle, it is the starting point for delivering on short- and long-term climate targets given the central role of the energy sector in global greenhouse gas emissions;
2. transitioning away from fossil fuels and scaling up clean energy is more than a climate imperative, it's central to sustainable development, energy security, and social equity;
3. NDCs are key to aligning national energy strategies with climate ambitions, and to turning them into investment-ready, implementable plans that also support robust energy plans. 

As countries set their climate ambitions in new NDCs, there is an opportunity to define more specific and quantitative energy targets and actions. This will lay the foundation for robust implementation of energy sector actions. 

What Needs to Happen According to the Global Stocktake

The first Global Stocktake (GST) makes it clear that we are not moving fast enough and stresses that energy sector action is critical (paragraph 28). To align with the Paris Agreement, countries need to:

• triple renewable energy capacity by 2030,
• double the annual rate of energy efficiency improvements by 2030,
• transition away from fossil fuels in a just, orderly, and equitable manner,
• accelerate the deployment of other low-emissions technologies,
• reform fossil fuel subsidies.

Beyond ambition gaps, the GST also calls out the massive shortfall in implementation of country commitments, especially in linking NDCs with long-term planning (e.g. net-zero targets and long-term development strategies), development needs, and investment flows.

The new cycle of NDCs in 2025 provides a critical opportunity to enhance existing climate and energy targets. Strengthening these targets is essential to close ambition and implementation gaps, bringing the world closer to a 1.5°C-aligned energy system that also advances progress on the Sustainable Development Goals (SDGs). 

Research led by the UNDP shows that the global goals to triple renewable energy capacity and double the rate of energy efficiency improvement can drive transformative development outcomes by 2060. 

For example, 193 million fewer people would live in extreme poverty, 142 million fewer would suffer from malnutrition, and 550 million more would gain access to safe water and sanitation compared to a business-as-usual pathway.

 

According to the IEA analysis From Taking Stock to Taking Action, the GST energy targets could, on their own, get the world two-thirds of the way to a Paris-aligned energy system by 2030. If fully implemented, the GST energy goals could deliver ambitious new NDCs, reducing global energy-related emissions by over 60% by 2035.

What’s Stopping Implementation?

As of August 2025, 31 countries have submitted their new (third-generation) NDCs, many mentioning renewable energy and efficiency. 10 out of 16 NDCs submitted by fossil fuel producing countries refer to fossil fuel production, however most (7 out of the 10) focus on reducing domestic emissions not phasing out production itself (i.e. continuing to produce fuel whether for domestic use or exports).

Relatedly, the Climate Change Expert Group made an initial review of 29 NDCs submitted between June 2024 and February 2025 showing that countries are clearly responding to the GST outcomes on energy. However, there is room for using a more comprehensive set of quantitative indicators to respond to all calls in the GST. Renewable energy and energy efficiency are an important focus, but action across all areas of the energy system is necessary to limit global warming, such reducing methane emissions and phasing out fossil fuel subsidies. Indicators can help countries track progress against the GST goals and help maintain attention on challenging but necessary reforms. 

Despite progress, participants agreed that important challenges continue to stand in the way of turning energy-related NDC targets into real-world change. These include:

1. Investment gaps: Emerging and developing economies (excluding China) receive only 20% of global annual investment in the power sector, and only 7% of international public finance for global renewable energy investment. High capital costs, limited financial pipelines, and perceived risk make it difficult to scale up renewable energy uptake. Vehicles to access finance that does not add to sovereign debt are therefore key for moving from ambition to implementation. A strong commitment to renewable energy in the new NDCs can be the starting point for attracting non-debt inducing public finance and leveraging more private investment.
2. Fragmented governance: In some countries subnational governments have different agendas than the national government, complicating national NDC implementation. Coordination of policy implementation at different governance levels (but also across sectors and ministries) is key—but often lacking. The NDC update process, if done well, is an opportunity to increase this coordination, and can facilitate a more holistic approach to implementation.
3. Public resistance: Planning and implementation is of fossil fuel phase down and clean energy scale ups needs to be done respecting the principles of a just transition, including redistributive and procedural justice, or local communities may oppose projects, slowing implementation. Just transition principles are therefore necessary to accelerate clean energy deployment. Including just transition elements in the new NDC shows a political commitment by governments to ensure that the energy transition will be people-centered.
4. Political economy of fossil fuels: Countries with state-owned fossil fuel companies or fossil-export economies have a harder time transitioning away from fossil fuels, since the dependency extends beyond energy, to the economic and political spheres, resulting in more internal resistance to phase-outs. New NDCs are an opportunity to kick-off or continue a societal discussion about how to progress towards an orderly, just, but ambitious transition away from fossil fuel dependency, and how the coal, oil, and gas sector must contribute to reducing emissions (e.g. methane emissions control, investing in clean energy, and decarbonization opportunities for the whole economy, etc.) and could improve transparency and ambition through several indicators and targets (e.g. for their national oil companies or fossil-fuel dependent regions).
5. Capacity constraints: Climate impacts threaten existing and planned infrastructure, especially in vulnerable areas, making it crucial to have data-driven energy planning. Some countries including small island developing states (SIDS) and lower-income countries often lack the technical capacity to conduct comprehensive energy modelling and measurement, reporting, and verification (MRV) of energy and climate data. Capacity constraints can further impact the level of progress on implementation. Therefore, capacity building, technology transfer, and finance will be needed to support vulnerable countries in their efforts to accelerate their energy transition, while creating resilient energy systems that can resist (or even mitigate) the increasing climate change impacts that they face.

How Can NDCs Be Made More Actionable on Clean Energy?

Turning NDCs into real-world energy transition pathways requires more than ambition: it demands specificity, integration, and implementation frameworks that work on the ground. In our discussion, participants repeatedly emphasized that targets alone are not enough. 

For NDCs to drive meaningful change in the energy sector, they must become operational drivers for action.

 

First, NDCs should be aligned with countries' energy, industrial, and development strategies. This includes assessing current energy use, identifying emissions drivers, and filling critical data gaps. Embedding energy targets in long-term low emission development strategies (LT-LEDS), and national investment plans ensures coherence across timeframes and sectors.

Second, energy-related NDC targets need to be more granular and measurable. This means disaggregating national goals to sectoral, subnational, and even municipal levels. Clear indicators for renewable deployment, energy efficiency gains, fossil fuel reductions, economic diversification including in state-owned enterprises, reducing fossil fuel fiscal dependence, and energy access can help track progress and guide finance. 

Third, participants stressed the importance of engaging subnational governments and local communities. Many implementation barriers arise at local levels—especially for land use, permitting, and public acceptance of infrastructure projects. Involving these actors and encouraging alignment of sub-national policies with NDCs will improve the prospects for reform by the governments (provincial and local) and institutions (state-owned enterprises and regulatory authorities) with the power to implement the stated goals.  

Finally, mobilizing finance is essential. Shifting financial flows, both direct and indirect (e.g. fossil fuel subsidies) from fossil fuels to renewable energy can provide a large source of funding for the energy transition whilst reducing harm. Furthermore, de-risking investment through concessional finance, guarantees, and project development support—particularly in developing countries—can unlock the scale of resources needed. Building robust pipelines of bankable clean energy projects will help bridge the implementation gap and make NDCs a true engine of decarbonization.