IEA 2025 Report Batteries Account For 40% Of Energy Patents As Global Energy Spending Nears 10% Of GDP – Report

The global energy sector is going through a major shift as countries focus more on economic competitiveness and energy security. According to the latest report by the International Energy Agency, governments now see energy technology leadership as a key advantage in the global economy. Energy spending today accounts for nearly 10 percent of the world’s GDP, making innovation in this sector more important than ever before.

One of the most striking findings in the report is the rapid growth of battery technology. Batteries now make up about 40 percent of all energy-related patents worldwide. This is the highest share ever recorded for a single energy technology. The growth shows how important energy storage has become for modern power systems, electric vehicles, and industrial policy. Countries such as China, South Korea, and Japan continue to lead in battery-related patents. China, in particular, has seen sharp growth in cathode-material patents, increasing its share from just 4 percent in 2010 to nearly 40 percent in recent years.

While patent activity remains strong, the financial environment for innovation is changing. Public spending on energy research and development is estimated to have fallen slightly to around USD 55 billion in 2025. Venture capital funding for energy start-ups has also declined for three straight years. In 2025, energy venture capital dropped to about USD 27 billion, as many investors shifted their attention toward artificial intelligence and digital technologies. However, the report notes that some new areas are attracting fresh interest. Carbon dioxide removal technologies, advanced geothermal systems, and nuclear fusion are beginning to draw more funding, partly offsetting reduced investments in electric mobility.

Despite funding challenges, 2025 has seen several major technological milestones. More than 150 innovation highlights were recorded during the year. These include the development of solar cells reaching 33 percent efficiency, which marks an important step forward in improving solar power performance. Another breakthrough was the launch of the first kilowatt-scale solid-state air conditioning system, which could improve energy efficiency in cooling applications. Fusion energy research has also made progress. Experimental achievements were reported across major research facilities in the United States, Europe, and China, signaling continued global competition in next-generation power technologies.

The report highlights strong regional differences in innovation activity. China’s corporate research and development spending has accounted for most of the global growth in this category over the past decade. Chinese inventors are now filing twice as many international energy patents as inventors from the United States or Europe. At the same time, Europe remains a leading hub for energy start-ups, attracting about 25 percent of global energy venture capital funding in 2025. The United States continues to play a major role, especially in venture capital investment and nuclear technology development.

The IEA concludes that although policy priorities may differ from country to country, one message remains clear. Governments must provide stable and predictable funding to support long-term innovation. International cooperation and partnerships will also be essential to sustain progress in high-risk and high-reward technologies. As global competition increases, consistent support for research and development will be critical to maintaining momentum in the energy transition.