Economy-wide emissions rose by 2.4%, according to a new analysis of federal data by the research firm Rhodium Group. This ended a two-year streak of emissions reductions and clocks in as the third-largest emissions increase in the last decade. The country is still emitting 18% less than it did in 2005 (compare that to President Barack Obama’s goal of a 26% to 28% reduction by 2025), but the economy has resisted a smooth glide toward decarbonization.
“It’s not the most notable increase that we’ve seen, but in the context of this bumpy downward trend, it is an up year,” said Rhodium Group research analyst Michael Gaffney.
Some of that emissions increase came from factors that Gaffney referred to as statistical “noise,” namely a very cold winter that pushed up space-heating needs in buildings. That kind of variation is to be expected. But changes in the power sector could be more potent signals of things to come.
The power sector has generally led the U.S. economy in emissions reductions, largely because gas plants have outcompeted coal plants over the last two decades, and gas emits less carbon when burned than coal. But in 2025, coal proved that it’s not dead yet. Natural gas prices rose by 58% over 2024 levels, under pressure from space-heating demand and global exports via liquefied natural gas terminals. At the same time, demand for electricity soared: Generation increased by 2.4% from the year before, as data centers, crypto miners, and electric vehicles consumed more energy.
Taken altogether, the rise in demand at a time when gas was less economically competitive gave coal an opening in the markets, and its generation surged by 13% in 2025.
“This year is a bit of a warning sign on the power sector,” Gaffney said. “With growing demand, if we continue meeting it with the dirtiest of the fossil generators that currently exist, that’s going to increase emissions.”
