Generation: How Green Trends are Impacting Construction

The sustainability landscape in 2025 finds itself in a muddle of contradictions, according to a new report from investment firm Generation.

Generation's 2025 Sustainability Trends Report shows a year of major progress in climate technology, set against a backdrop of political manoeuvring.

For construction and infrastructure, this creates a complex environment where technological and economic trends diverge from political winds, especially in the US.

While clean technologies are scaling quickly and attracting capital, global climate politics have entered a “period of retrenchment”.

The re-election of a Trump administration has seen the US roll back climate policy and abandon the Paris Agreement, pressuring other nations to weaken their own pledges.

US policy reversal and China's emerging dominance

The report sees 2025 as a stress test for whether global climate action can survive the disengagement of the US.

Trump's administration has withdrawn from the Paris Agreement and moved to strip the federal government of its power to regulate greenhouse gases.

Generation estimates these policy reversals have already cancelled nearly US$30bn in prospective clean‑industry investment.

Modelling suggests this lost investment could reach US$500bn over a decade – a blow for the construction sector.

This has created a power vacuum that China appears to be filling, with the report arguing China is becoming the world’s leading sustainability force. This comes as a result of its industrial policy and growing exports of renewable energy technology and electric vehicles (EVs).

The authors describe China as a future “electrostate” and note its emissions may be close to peaking well ahead of its 2030 target.

For context, EVs already account for nearly 60% of new car sales in China, compared to about 10% in the US in 2024.

Solar and battery infrastructure reshaping the grid

On the supply side, the energy system is being reshaped by solar and batteries. Global solar electricity generation increased by 28.3% last year.

In a single month, China added more solar capacity than any other country has ever built in a year.

Battery deployment is also changing grid profiles. In California, batteries meet about 20% of peak evening demand, while in parts of Australia, that figure rises to 30%, displacing the need for gas‑fired generation during critical hours.

The challenge, however, is rising demand from EVs, heat pumps, data centres and air conditioning.

Power demand growth is pushing towards 4% annually – almost double the long-term average, allowing fossil-fuel generation to rise.

While coal’s share of the energy mix is falling, the absolute amount burned remains near record highs, sustained by use in China and India.

This suggests continued construction needs for both renewable and traditional power infrastructure.

EV infrastructure and industrial decarbonisation

In road transport, electrification is the primary goal. Electric cars are expected to make up 25% of global auto sales this year.

They constitute more than half of new sales in China and a quarter in Europe, but the US is lagging at only 10% of car sales in 2024.

Decarbonisation of heavy-duty transport is also beginning, with electric lorry sales rising. However, high-power charging infrastructure for eHGVs is at a “barely-started” stage, pointing to a major future construction need.

In contrast, the report states that the green hydrogen bubble has burst. Many European projects have been cancelled as the cost gap with grey hydrogen remains wide.

The authors write that enthusiasm for hydrogen “may have cost us years in which industrial decarbonisation could have been pursued by more practical means", signalling a potential change in investment for industrial construction.

The core message is that the economics of the transition are pulling one way while politics pushes another. Companies that pause decarbonisation due to this turbulence risk being on the wrong side of “the race for the future”.

The report opens with a quote from Shakespeare’s Henry VIII: “And ’tis a kind of good deed to say well: And yet words are no deeds.”

The world will be watching to see if leaders’ actions align with their words in 2026.