Falling birth rates seen as structural risk to energy demand

China’s population fell 3.4 million in 2025 as demographic risks grow.

Falling fertility rates and demographic shifts could reshape long-term energy demand forecasts, according to Wood Mackenzie.

The research identified demographic decline as a structural risk for energy markets, with a United Nations (UN) low-birth-rate scenario placing peak global population at 8.9 billion in 2053 before falling to 7.0 billion by 2100.

China provides the clearest example of the trend in Asia, with its birth rate falling to 5.6 births per 1,000 people in 2025, the lowest level recorded.

Its population also declined by 3.4 million people during the year, with China’s population now standing at 1.40 billion, 9.6 million below the UN’s 2024 projection.

“Demographics dictate destiny,” said Peter Martin, Head of Economics at Wood Mackenzie, adding that declining fertility rates and China’s population falling below UN forecasts highlight how shrinking workforces could slow GDP growth and affect energy demand.

Wood Mackenzie said global fertility rates reached 2.2 births per woman in 2025, close to the 2.1 replacement ratio required to maintain a stable population.

It added that lower fertility rates could affect energy and commodity demand projections through 2060 and beyond.

The UN currently projects the global population will increase to 10.0 billion in 2060 from 8.2 billion in 2025. The firm said observed fertility trends suggest the forecast could be revised lower.

Wood Mackenzie expects global primary energy consumption to rise by 8% from current levels, reaching a peak of 717 exajoules (EJ) in 2035 before declining to 672 EJ by 2060. Electricity consumption is forecast to double to 71 petawatt-hours over the same period.

It said unmet energy needs across Asia and Africa, alongside rising incomes, electrification, and technology adoption, will continue to support energy demand drivers.

A lower population trajectory could increase investment in automation as economies face smaller workforces.

The firm noted that the shift could support electricity and critical mineral demand whilst creating a structural shift away from hydrocarbons.

“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 whilst accelerating the structural shift away from hydrocarbons.”

Wood Mackenzie said demographic changes should become part of long-term energy planning as governments and companies assess future demand patterns.