Accelerating declines in global fertility rates present a material risk to long-term energy demand projections

LONDON/HOUSTON/SINGAPORE, July 09, 2026 (GLOBE NEWSWIRE) -- Wood Mackenzie has published analysis warning that accelerating declines in global fertility rates present a material risk to long-term energy demand projections, with a UN low-birth-rate scenario placing peak global population at 8.9 billion in 2053, followed by a contraction to 7.0 billion by 2100.

The global fertility rate fell to 2.2 births per woman in 2025, perilously close to the 2.1 replacement ratio needed to keep the population stable, according to new analysis from Wood Mackenzie that identifies demographic decline as a structural risk for long-term energy demand.

The research finds that plummeting fertility rates could materially reshape energy and commodity demand to 2060 and beyond. The trend joins the war in Iran as a risk factor that strategic planners must now weigh.

Since 2007, when the rate stood at 2.6 births per woman, the decline has been swift. The United Nations currently projects global population will rise from 8.2 billion in 2025 to 10.0 billion in 2060. Observed fertility trends suggest that figure may prove too high.

A new UN World Population Prospects report is expected in July 2026. Wood Mackenzie does not anticipate a revision as extreme as the low-birth-rate scenario but notes that any downward adjustment will carry economic consequences. Ageing populations and shrinking working-age cohorts will exert downward pressure on global GDP forecasts.

China provides the clearest illustration of the trend. Its birth rate fell to 5.6 births per 1,000 people in 2025, the lowest ever recorded, sitting between the UN's expected 6.2 and its low-case scenario of 4.7. China's population contracted by 3.4 million people last year and now stands at 1.40 billion, some 9.6 million below the UN's 2024 projection.

“Demographics dictate destiny," said Peter Martin, Head of Economics at Wood Mackenzie. "The fertility rate has fallen from 2.6 births per woman in 2007 to 2.2 today, and China's population is already 9.6 million below the UN's 2024 forecast. Shrinking workforces mean slower GDP growth, with direct consequences for energy demand. This is not a tail risk. It belongs in the core scenario of every long-range model the industry relies on."

Wood Mackenzie forecasts global primary energy consumption will increase by 8% from current levels, peaking at 717 exajoules (EJ) in 2035 before declining to 672 EJ by 2060. Electricity consumption is projected to double to 71 petawatt-hours over the same period.

Even under a pessimistic demographic scenario, global population would still increase by around 700 million people by 2060. Vast unmet energy needs across Asia and Africa, combined with rising incomes and the rapid scale-up of electrification, renewables and AI adoption, mean most drivers of energy demand remain robust. Those forces also reinforce the decoupling of economic growth from hydrocarbons.

A lower population trajectory would, however, exacerbate existing pressures. Shrinking workforces increase the incentive to invest in AI-driven automation, embedding upside for electricity and critical minerals while creating a structural headwind for molecules. There is also a distributional risk: automation could concentrate wealth among capital owners at the expense of labour, limiting consumer demand.

A lower population does not diminish the draw on critical minerals," said Prakash Sharma, Head of Energy Transition at Wood Mackenzie. "Electrification, renewables and AI adoption create unprecedented demand for those resources while accelerating the structural shift away from hydrocarbons. The capital exists now. The question is whether governments move decisively enough to deploy it before the window narrows after 2060."

Pressures on public finances and living costs are likely to intensify progressively. Governments need to act decisively to secure private and public capital, ensuring energy systems adapt before the demographic profile shifts dramatically after 2060. AI-driven productivity gains could offset the drag on economic growth, and public finances could prove more resilient post-2060 if investment in smart, clean energy infrastructure is made while capital is available.

An earlier and lower global population peak is now viable. Whether it proves a headwind or a catalyst for the next commodity super-cycle will depend on how the world manages the relationship between demographics, economic growth and technology.

-ENDS-

Background:

Population growth has long underpinned energy demand projections. Complex socio-economic factors are cited in existing research as drivers of the trend, among them rising educational attainment, female workforce participation, housing costs and the proliferation of smartphones. The release of the UN World Population Prospects report, expected in July 2026, is likely to prompt a reassessment of long-range demand projections across the energy industry. Wood Mackenzie's forecast horizon runs to 2060, by which point the demographic profile is expected to have shifted materially.

For further information please contact Wood Mackenzie’s media relations team:

Chris Boba
+44 7408 841129
Chris.Boba@woodmac.com 

Mark Thomton
+1 630 881 6885
Mark.thomton@woodmac.com

Hla Myat Mon
+65 8533 8860  
hla.myatmon@woodmac.com 

Angelica Juarez
angelica.juarez@woodmac.com

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