7 TRENDS IN THE GREEN ECONOMY THAT WILL DEFINE 2025
What are the trends in the green economy for 2025? Voice to the experts.
Accelerating the EU Circular Economy
In 2025, the European Commission will step up efforts to promote the circular economy by updating and implementing several key directives and regulations. The appointment of Jessika Roswall as Commissioner for Environment, Water Resilience and Competitive Circular Economy will see efforts on the circular economy strengthened, focusing on incentives, investment and implementation, putting the topic at the heart of the Green Deal 2.0.
Among the most important dossiers is the Circular Economy Act to create market demand for secondary materials and establish a single market for waste, while also drafting an updated strategy for the bio-economy. Attention will also be paid to the implementation of the Ecodesign for Sustainable Products Regulation (ESPR) and the Directive on the Right to Repair, adopted in 2024, which will guarantee consumers the right to repair products such as household appliances and electronics, introducing a platform to connect consumers and repairers. Expectation for the new Packaging Regulation, which aims to make all packaging recyclable by 2030, setting targets for materials such as plastics and metals.
China will reach peak greenhouse gas emissions
China is set to peak its greenhouse gas emissions in 2025, a crucial target for the global energy transition. According to the Financial Times, the unprecedented increase in the adoption of solar power and electric vehicles is accelerating the decarbonisation of the Chinese economy. The nation deployed more than 200 gigawatts of solar capacity in 2023 alone, with further expansion planned for the coming years. In parallel, the sale of electric vehicles has reached 30 per cent of the domestic car market, positioning China as a world leader in this sector.
However, significant challenges remain: the energy mix is still dominated by coal, which accounts for about 60% of electricity production. Government policies, including restrictions on industrial emissions and massive investments in clean technologies, aim to reverse this trend, making 2025 a turning point. This milestone will not only strengthen China's commitment to the Paris Accords, but also have a significant impact on global efforts to keep climate warming below 1.5 °C.
AI and the environment
For many analysts, 2025 will mark the acceleration of the use of AI as a crucial tool in addressing environmental challenges. According to predictions by SAS Software, AI is specialising and embracing sustainability, indicating an increasing integration of these technologies in addressing environmental polycrisis with concrete applications. Such as climate risk forecasting that anticipates extreme phenomena such as hurricanes and fires, reducing socio-economic impacts. Smart grids and digital twins optimise the management of renewable energy sources and water resources, improving efficiency and resilience. At the same time, blockchain is being used to track waste and raw material flows, promoting a circular economy.
However, AI also poses environmental challenges: its development requires significant consumption of energy and raw materials, contributing to significant emissions.
COP16bis in Rome, biodiversity invades Italy
Although the chairmanship of the Biodiversity COP will remain in Colombian hands, led by the able environment minister Susana Mohamad, the conclusion of the work on finance for biodiversity within the Global Biodiversity Framework will be held in Rome from 25 to 27 February 2025. This is a great opportunity for Italy to bring the issue to the forefront of media attention in a country that looks at biodiversity too distractedly.
The negotiation discussions will have to address key issues such as the resource mobilisation strategy, aimed at securing USD 200 billion per year by 2030 (and at least 20 by 2025) for biodiversity initiatives, and reducing harmful incentives by at least USD 500 billion per year by the same deadline. Additional agenda items include the finalisation of the Monitoring Framework to measure progress against the 23 KMGBF targets, and the adoption of the Planning, Monitoring, Reporting and Review Mechanism (PMRR), which is crucial for reviewing progress at COP17. For the food and cosmetics sectors, an unmissable opportunity to launch the general states of biodiversity in Italy.
Reporting, starting in earnest
Although reporting for CSRD in Europe, and for a small number of companies, will start in 2026, 2025 will see an escalation of efforts by companies around the world to report their impacts and emissions. We will see a proliferation of new companies consulting and measuring dual materiality, even in new areas such as biodiversity. Also affected will be all companies operating in the value chain of European companies subject to the directive, which are often required to provide sustainability data, making it crucial to prepare for strategic partnerships and access to increasingly ESG-conscious markets.
In addition, adopting high standards of transparency helps to improve corporate reputation, attract investors and access capital, as environmental, social and governance criteria are increasingly influencing global financial choices. But do not think that this will stop at the EU perimeter. For non-European companies, compliance with CSRD is a requirement to operate in the EU market, which requires an increasing commitment to sustainable practices. With the convergence of global standards, such as those of the ISSB, CSRD is no longer just a European regulation, but a benchmark for addressing global sustainability challenges and ensuring sustainable competitiveness.
COP30, the climate showdown
In November, the 30th Conference of the Parties (COP30) of the UN climate change negotiations will take place in Belém, Brazil. Renamed 'the Amazon COP', the summit will take stock of the global commitments of all 196 member countries and seek to mobilise additional financial resources (after the weak result at COP29 of allocating USD 300 billion per year by 2035 to be mobilised to support LDCs). By February 2025, all countries will have to submit new and more ambitious NDCs, i.e. national targets for reducing greenhouse gas emissions. If they fall short, goodbye to the goal of keeping global average temperatures within 1.5°C.
According to Brazil's President Luiz Inacio Lula da Silva, 'COP30 will be our last chance to avoid an irreversible breakdown of the climate system'. The Belem negotiations will discuss not only energy transition but also how deforestation, climate finance, nature-based solutions and biodiversity protection can contribute to reducing greenhouse gases in the atmosphere. It will not be an easy COP: the absence of the US from the negotiations will weigh heavily (if Trump keeps his promises), and opposition is to be expected from countries such as Saudi Arabia, Russia, but also India and Indonesia.
Will China, Brazil and Europe be able to hold up the ambition of the Paris Agreement?
Electric salt, make way for sodium ion batteries
Sodium-ion batteries, also known as salt batteries, will prove to be a viable alternative to traditional lithium-ion batteries, thanks to the use of sodium, an abundant, cheap and readily available material. Unlike their lithium counterparts, these batteries do not require the use of critical materials such as cobalt and nickel, thus reducing production costs and environmental impact. Despite having a lower energy density, sodium batteries are characterised by their thermal stability and safety, features that make them ideal for stationary applications, such as the storage of renewable energy in solar and wind power plants, where weight is not a determining factor.
On the commercial front, however, we have also witnessed major stoppages in the industrialisation of this new type of battery, well exemplified by the failure of the European company Northvolt, due, moreover, to bad management. Once again, the Chinese will win the industrialisation race, with companies such as CATL launching the first products destined for the market, scheduled for 2025 and aimed mainly at storage systems and economy electric vehicles. Although they are not intended to replace lithium-ion batteries in portable devices or high-end vehicles, they represent a crucial solution for promoting energy sustainability and lowering costs in the renewables sector.