New York: Global investment in the low-carbon energy transition exceeded $2 trillion for the first time last year, according to a report released by BloombergNEF on Thursday.
Why It Matters
Governments and industries worldwide are pouring funds into clean energy and infrastructure to meet climate commitments under the Paris Agreement. However, experts caution that current investment levels fall far short of what is needed to achieve net-zero emissions by mid-century.
The BloombergNEF report underscores a stark reality: global investment in energy transition must average $5.6 trillion per year between 2025 and 2030 to stay on track. At present, annual investments are only 37% of that target, raising concerns about the feasibility of meeting long-term climate goals.
Investment Trends
The report highlights an 11% increase in global energy transition investment last year, reaching a record $2.1 trillion. Key drivers included renewable energy, power grid expansions, electrified transportation, and energy storage developments.
Despite this record-breaking figure, the pace of investment growth slowed compared to the previous three years, when annual increases ranged between 24% and 29%.
Mainland China led the world in investment, contributing $818 billion—a 20% rise from 2023. The report notes that China’s continued dominance in the sector is crucial for global decarbonization efforts.
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Broader Context
The policy landscape is also shifting. One of U.S. President Donald Trump’s first moves upon returning to office last week was to withdraw the United States from the Paris Agreement. The decision is expected to slow U.S. climate funding for international initiatives, raising concerns about the pace of global efforts to mitigate climate change.
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Industry Perspective
Energy experts stress the need for accelerated efforts in emerging areas such as industrial decarbonization, hydrogen production, and carbon capture technology.
“There is still much more that needs to be done, especially in emerging areas like industrial decarbonisation, hydrogen and carbon capture, in order to reach global net-zero goals,” said Albert Cheung, deputy chief executive of BloombergNEF.
