Power Demand and Building Heating Push US Emissions Higher After Two-Year Decline

US greenhouse gas emissions rose by 2.4% in 2025, marking the first increase in two years and growing faster than the economy, according to a new analysis by the Rhodium Group. The rebound was driven primarily by rising electricity demand and increased fuel use for heating buildings, signaling renewed pressure on the country’s emissions trajectory.

Rhodium found that emissions from direct fuel use in buildings climbed 6.8% year on year, reflecting higher heating demand. At the same time, power sector emissions rose 3.8% as utilities leaned more heavily on fossil fuels to meet surging electricity needs from data centers and bitcoin mining. Higher natural gas prices pushed coal-fired generation up by 13%, making 2025 only the second year in the past decade to see an increase in coal use.

The shift disrupted a long-term decline in coal generation, which remains 64% below its 2007 peak, but highlights how rapidly growing digital infrastructure can strain power systems and revive more carbon-intensive sources.

Rhodium noted that the emissions increase does not yet reflect the full impact of recent policy changes under the Trump administration, including efforts to roll back environmental regulations, halt renewable energy incentives and reduce the collection of emissions data. Those effects could become more pronounced if electricity demand continues to surge and the grid relies on existing fossil fuel capacity rather than new clean energy.

The report also pointed to the repeal of federal tax credits in 2025 as a potential brake on electric vehicle adoption, which had previously helped contain transportation emissions.

Crucially, emissions grew faster than economic output, with real GDP expanding an estimated 1.9%, reversing the recent trend of decoupling emissions from growth. The findings underscore growing uncertainty around US climate progress following the abandonment of emissions targets set under the Paris Agreement.

US emissions rising again after a two-year decline is a warning that structural energy-efficiency and electrification work still has a long way to go, and disclosure narratives leaning on past-year improvements are increasingly vulnerable. Our climate-action and ESG-strategy teams help US clients build transition-plan narratives grounded in sustained-progress data, not one-off gains.