COP31 Energy Push: Clean Power Funding Lags as Presidency Targets Building Efficiency
The route to clean energy is now less contested than it was a decade ago. Most governments accept that electrification and energy efficiency are necessary if countries are to meet climate goals. However, accepting a principle and financing its delivery are not the same thing.
Türkiye's incoming COP31 Presidency is attempting to bridge that gap. The summit, scheduled for late 2025, will focus on electrification, building efficiency and modern power grids. Meanwhile, new analysis reveals a troubling imbalance in how countries are managing the shift away from fossil fuels.
Public financing for coal, oil and gas has fallen sharply in many nations. In some cases, funding has dropped by as much as 80% compared with annual averages recorded between 2019 and 2021. That decline is significant. Nevertheless, less than half of the money withdrawn from fossil-fuel projects is being redirected toward clean energy.
The International Institute for Sustainable Development examined energy finance among members of the Clean Energy Transition Partnership. This coalition committed to ending international public support for unabated fossil fuels while increasing investment in clean energy. The findings were published in a report titled Down But Not Out.
Why missing finance slows the energy transition
Public money plays a different role than private capital. It can reduce project risk, support early-stage development and attract commercial investment. When governments withdraw funding from fossil fuels without replacing it with clean-energy support, projects may stall despite strong technical potential.
This pattern is particularly visible in developing economies. High borrowing costs, limited fiscal capacity and weak project pipelines prevent otherwise viable renewable schemes from reaching construction. Removing fossil-fuel subsidies does not automatically create the transmission lines, battery storage or grid upgrades needed to integrate clean power.
The energy transition requires more than ending support for coal plants. It demands investment in infrastructure that can replace fossil-fuel systems. Transmission networks must be expanded. Generation capacity must shift to renewables. Buildings need efficiency upgrades. Transport systems require electrification. Each of these changes carries upfront costs that public finance can help to meet.
For UK businesses operating internationally or managing global supply chains, this financing imbalance creates uncertainty. Projects that appeared viable on paper may face delays or cancellation if host governments lack the capital to support grid connections, land-use planning or regulatory approval processes.
Türkiye sets a global electrification target
Türkiye's COP31 Presidency has proposed raising electricity's share of global final energy consumption from just over 20% today to 35% by 2035. The initiative is known as the "35 by 35" target. It was formally presented during UN climate meetings in Bonn on 9 June 2025.
Murat Kurum, the COP31 President-Designate, described electrification as a central mechanism for reducing fossil-fuel use. He emphasised that the target must be accompanied by renewable-energy expansion, grid investment, storage capacity and financial support for developing countries.
The target is not simply a demand forecast. Its climate value depends on whether additional electricity comes from low-carbon sources. If electrification is powered by coal or gas, emissions reductions may be limited or delayed. Consequently, the Presidency's materials frame electrification and clean-power deployment as mutually dependent priorities.
In September, Türkiye announced it would advance a final 35-by-35 Global Electrification Pledge. The Presidency also proposed establishing mechanisms to monitor progress, share implementation experience and help developing countries identify grid investment needs. An Electrification Day, developed in partnership with the International Renewable Energy Agency, is intended to examine how electrification can support both energy efficiency and renewable deployment.
Building efficiency takes centre stage
Buildings represent a significant part of global energy demand. They also offer large opportunities for efficiency improvements and electrification. Türkiye's Presidency has proposed reducing energy-consumption intensity in the building sector by at least 25% by 2035 under its Resilient Cities priority.
The proposed measures include wider use of electric appliances, heat pumps, rooftop solar, batteries and more efficient building systems. In September, the Presidency announced a compact focused specifically on cutting buildings' energy-use intensity by at least 25% by 2035.
Efficiency improvements are particularly important. Electrifying buildings without reducing energy demand could increase pressure on power systems. Peak demand would rise. Generation and grid investment would need to expand faster. Efficiency measures can reduce peak load, lower energy bills and improve resilience during extreme weather.
For UK businesses, these priorities align with domestic policy trends. The government has committed to upgrading building stock, expanding heat-pump deployment and improving energy performance standards. Companies involved in public sector tenders increasingly face questions about building energy use and carbon reduction plans.
Moreover, businesses operating commercial property portfolios face rising pressure to improve energy performance. Efficiency upgrades can reduce operating costs, improve tenant satisfaction and increase asset values. The COP31 building efficiency target signals that these expectations are becoming global norms, not regional exceptions.
How the finance gap affects UK businesses
The shortfall in clean-energy finance has practical consequences for UK companies. Businesses that rely on international supply chains may face delays if suppliers lack access to reliable, affordable electricity. Manufacturing partners in developing economies may struggle to meet carbon-reduction commitments if grid connections are unreliable or powered by coal.
Exporters targeting markets with strong climate policies may encounter new requirements. Public procurement frameworks increasingly favour suppliers with credible net-zero plans. Those plans often depend on electrification and renewable energy. If the infrastructure needed to support those changes is delayed by insufficient finance, suppliers may struggle to meet tender criteria.
Companies managing their own Scope 3 emissions face similar challenges. Supply-chain emissions often account for the largest share of a business's carbon footprint. Reducing those emissions requires suppliers to access clean energy. If public finance for renewable projects is inadequate, suppliers may continue relying on fossil fuels regardless of corporate commitments.
Additionally, businesses investing in overseas operations must consider energy reliability. Grids that lack adequate investment may be vulnerable to outages, extreme weather or demand surges. These risks can disrupt production, delay shipments and increase costs. The IISD analysis suggests that many countries are withdrawing fossil-fuel support without adequately funding the infrastructure needed to replace it.
Therefore, UK businesses should monitor how host governments are managing the transition. Countries that combine fossil-fuel phase-out with strong clean-energy investment are more likely to offer stable operating environments. Those that reduce fossil-fuel finance without replacing it may face prolonged transition risks.
What the summit agenda signals for compliance and planning
COP31's focus on electrification and building efficiency reflects a broader shift in climate policy. Governments are moving from high-level commitments to sector-specific targets. Buildings, transport and industry are each being addressed with tailored measures.
For businesses, this trend suggests that compliance requirements will become more granular. General carbon-reduction pledges may be supplemented by sector-specific benchmarks. Building energy-use intensity targets, for example, could inform future UK regulations on commercial property performance.
Public sector suppliers should pay particular attention. Procurement Notice PPN 06/21 already requires suppliers bidding for central government contracts above £5 million to publish carbon-reduction plans. As climate policy becomes more detailed, those plans may need to address specific issues such as building efficiency, electrification pathways and grid decarbonisation.
Furthermore, businesses preparing for carbon reporting under UK compliance frameworks should consider how electrification affects emissions calculations. Switching from gas heating to electric heat pumps, for example, shifts emissions from Scope 1 to Scope 2. The carbon intensity of grid electricity therefore becomes more important as businesses electrify their operations.
Understanding these dynamics can help businesses plan more effectively. Companies that anticipate policy trends are better positioned to manage costs, secure contracts and meet stakeholder expectations.
Five critical points for UK businesses
- Public financing for fossil fuels has fallen by as much as 80% in some countries compared with 2019 to 2021 averages, yet less than half of that funding is being redirected to clean energy.
- Türkiye's COP31 Presidency has proposed increasing electricity's share of global final energy consumption from just over 20% to 35% by 2035.
- The Presidency also aims to reduce building-sector energy-consumption intensity by at least 25% by 2035 through efficiency measures and electrification.
- The climate value of electrification depends on whether new electricity demand is met by renewable generation rather than fossil-fuel power.
- The finance gap identified by the International Institute for Sustainable Development suggests that many countries are withdrawing fossil-fuel support without adequately funding the infrastructure needed to replace it.
Practical steps for businesses navigating the transition
Businesses should start by assessing their own exposure to electrification and efficiency trends. Review energy use across sites, particularly buildings. Identify opportunities to reduce consumption before electrifying heating, cooling or processes. Efficiency improvements often deliver faster payback than switching fuel sources.
Next, evaluate grid decarbonisation in the regions where you operate. The carbon benefit of electrification varies depending on local power sources. In the UK, grid carbon intensity has fallen sharply as coal generation has been phased out. Other markets may still rely heavily on fossil fuels. Understanding these differences helps businesses prioritise investments and set realistic emissions targets.
Supply-chain planning should also account for energy infrastructure. Engage suppliers on their energy sources and carbon-reduction plans. Ask about access to renewable electricity, grid reliability and plans for electrification. Suppliers in regions with inadequate clean-energy finance may struggle to meet your expectations without support.
Consider how future policy changes might affect compliance requirements. The UK government has committed to ambitious climate targets. Building energy performance standards are likely to tighten. Public procurement criteria may become more detailed. Businesses with credible carbon-reduction plans and evidence of progress will be better positioned to compete for contracts and meet regulatory expectations.
Training and capacity building can help teams understand the implications of electrification and efficiency. SBS Academy offers courses on carbon reporting, net-zero planning and sustainable procurement, equipping businesses with the knowledge needed to navigate these changes confidently.
Finally, monitor COP31 developments closely. The summit's outcomes may influence UK policy, particularly on building efficiency and electrification. Businesses that understand the international context are better able to anticipate domestic regulatory changes and adapt their strategies accordingly.
Where to find authoritative guidance
The UK government's Department for Energy Security and Net Zero publishes policy updates, guidance and data on the energy transition, including electrification and building efficiency.
The International Institute for Sustainable Development's report, Down But Not Out, provides detailed analysis of public energy finance trends and clean-energy investment gaps. It is available on the IISD website.
Information on COP31 priorities, including the 35-by-35 electrification target and building efficiency proposals, can be found through the United Nations Framework Convention on Climate Change website as the summit approaches.
The UK government's Procurement Policy Note 06/21 sets out requirements for carbon reduction plans in public sector supply chains, including guidance on what businesses must publish and when.
Businesses seeking support with carbon reporting, net-zero planning or sustainable procurement can review authoritative resources from the Institute of Environmental Management and Assessment, which publishes standards and guidance for environmental professionals.