Trump's war in Iran driving shift from fossil fuels

During the 1979 Iranian oil crisis, US president Jimmy Carter gave a speech that would likely resonate today. "Solar energy will not pollute our air or water. We will not run short of it. No one can ever embargo the Sun or interrupt its delivery to us," he said. Rising fuel prices were crippling the world, and energy sovereignty was front of the president's mind. Behind him as he spoke was a new solar hot water system he had installed at the White House. But while Carter's solar prophecy took decades to realise, experts say Donald Trump's decision this year to start a war with Iran has accelerated global electrification efforts and may be considered a tipping point in the shift from fossil fuels. Renewables continued to grow in the US under Trump even before the war — despite his opposition. Solar generation is up 20 per cent, coal is down, and a record 86 gigawatt hours (GWh) of renewable projects are planned. And now that voters have stripped Republican control of Congress, the economic momentum behind renewables may be even harder to derail. A rocket under EVs Unlike the oil shocks of the past, this time, consumers have real electric alternatives, and the cost of installed solar and batteries has fallen 90 per cent since 2010. But the biggest story of the war has been the unprecedented rise of electric vehicles (EVs). Since the US and Israel began bombing Iran in February, both the fuel price and the sale of EVs have risen sharply around the world. "I think Donald Trump is the best salesperson for electric vehicles the world has ever seen," said Gabrielle Kuiper, an energy expert affiliated with the CSIRO and the ANU. "Everywhere is recognising that why would you be reliant on liquid imported fossil fuels when you can generate your own electricity with sunshine or with wind and then you can drive an electric vehicle." In Australia, EVs now make up close to a quarter of all new car sales, lining up with the global average, and in September and October 2026, battery electric cars outsold petrol cars. Asia leads EV boom Global EV sales were already rising before the Iran conflict, but growth has surged in emerging markets and places dependent on liquid fuel imports. Euan Graham, an analyst with global think tank Ember Energy, said a massive EV boom is taking place in South-East Asia. "Vietnam, Singapore, Thailand, now as well as Indonesia [are] all really picking up in their rate of EV sales and it's more than just the actual sales of cars themselves," he said. "The best-selling car in Vietnam is a VinFast car, which is a domestic manufacturer that already completely dominates the Vietnamese market and is now expanding overseas." While the Australian government's efforts to secure fuel supplies have minimised shortages domestically, other countries have been hit hard. Three-quarters of the world imports fossil fuels, and about 75 per cent of the world's oil supply is traded by sea. Countries are taking direct action to reduce dependence on imported fuel. In May, Laos suspended the import of internal combustion engine (ICE) vehicles, following Ethiopia's 2024 decision to ban the imports. "I don't think people would necessarily have expected a few years ago that it would be emerging markets taking those steps,"Graham said. In Europe, despite concerns about the impact of imported Chinese cars, EV sales have reached record levels, including in auto-manufacturing powerhouse Germany, where sales hit 37 per cent in October. The US is the only country where EV sales have fallen as US automakers pivoted back to ICE cars in the aftermath of the 2024 Trump victory. It is a bitter irony for a country that has just delivered a verdict on high gas prices. Avoided costs and emissions EVs might be the headline-grabbing story of 2026, but electrification more broadly continues to grow. "Around the world last year, about three quarters of the growth in electricity demand came from solar alone. And in some countries, solar was providing all of the growth already," Graham said. Australia's booming battery fleet, and the threat of a gas tax, have seen electricity prices drop since the start of the war, but overseas they have shot up as the conflict disrupted the supply of gas exports from Qatar. In response, heavy fossil fuel users like South Korea are investing hundreds of billions in renewables. In Vietnam, plans to build the country's biggest gas-fired power station have been scrapped to shore up energy sovereignty. Anna Freeman from the Energy Efficiency Council said the soaring cost of fossil fuels has made the economics of renewables more compelling. "Prior to this crisis, we were on track to spend $US4 trillion a year on oil and gas globally," said Anna Freeman, from the Energy Efficiency Council. Freeman also leads the Electrify Now coalition, which published research this week forecasting this year's total oil and gas bill could be over $US5 trillion. "We will be spending an additional $1.2 trillion, not for any additional products, just that is the price premium associated with this fossil fuel crisis," Freeman said. "By contrast, we can deliver the net zero energy transition for $3.5 trillion per year," Freeman said. "And that gets us so much more because it builds us a more efficient and a more affordable and a more secure energy system." A recent report from Ember found that the global electric car fleet has helped save about $20 billion in crude oil costs in the six months since the US-Israel war with Iran. Dawn of the age of electricity? But there are some hard numbers that grind against the electrification narrative. EVs may now make up about a quarter of new car sales, but make up only five per cent of cars on the road. Coal, oil and gas still supply about 60 per cent of the world's final energy. And record growth in renewables in 2025 of 887 terawatt hours (TWh) did outpace electricity demand of 849TWh, but not by much. Electrification will be a key focus of the UN's annual climate summit, the Conference of Parties — or COP31 — this week. In June, the UN set a goal of 35 per cent electrification by 2035. "The world is entering the age of electricity. At COP31, we will flick the switch," wrote COP31 president-designate Murat Kurum, in a special report on electrification by the IEA last month. It is welcome news for Kylie Turner, the sustainable economies lead at Monash University's Climateworks Centre, who describes electrification as "the unloved child of the energy transition." "At COP28 in Dubai, the world signed up to a global pledge to triple renewables and double energy efficiency, and the piece of the puzzle that's missing is actually electrification." Almost 50 years after Jimmy Carter declared solar "feasible and cost-effective," Ember Energy analyst Euan Graham says the economics of electrification have moved beyond politics. "I'm most optimistic about transforming the power sector because it's gone far beyond climate targets," he said. "In terms of economics and the speed at which they can be built, clean technologies — especially wind, solar and batteries — are just winning."