Record Investments in Energy Transition Despite Slower Growth Rate
Global Energy Transition Investments Exceed $2 Trillion for the First Time
According to the latest BloombergNEF (BNEF) report titled “Energy Transition Investment Trends 2025,” global investments in low-emission energy transition have surpassed $2 trillion for the first time, reaching $2.1 trillion in 2024. Although this is a historic achievement, the growth rate of investments has slowed to 11%, compared to 24%-29% in the previous three years.
Leading Investment Sectors: Transport, Renewable Energy, and Power Grids
The largest share of global investments went to three key sectors: electrification of transport ($757 billion), renewable energy ($728 billion), and power grid development ($390 billion). The energy storage sector also saw growth, reaching a new record of $54 billion. This is a positive and much-needed signal for global energy.
Mature Technologies Dominate, Innovative Solutions Lose Momentum
Investments in mature technologies such as solar and wind energy amounted to $1.93 trillion, representing a 14.7% increase. This sector continues to attract capital despite challenges like policy issues, high interest rates, and expected drops in consumer demand. In contrast, innovative technologies, including electric heating, hydrogen, carbon capture and storage (CCS), nuclear energy, and clean industries and maritime transport, attracted only $155 billion, marking a 23% year-on-year decline.
China Leads Investments, Europe and the U.S. Lose Momentum
Unsurprisingly, China emerged as the largest investor in energy transition, allocating $818 billion—20% more than in 2023. This accounted for two-thirds of the global growth. In the United States, investments remained stable at $338 billion, while Europe and the UK saw declines, with investments falling to $381 billion and $65.3 billion, respectively.
Is the Current Investment Level Enough?
Albert Cheung, Deputy CEO of BNEF, noted that despite increasing investments, there is still much to be done in areas such as industrial decarbonization, hydrogen, and carbon capture. He emphasized that only close cooperation between the public and private sectors will enable the full potential of these technologies to be realized.
According to BNEF’s forecasts, in order to achieve the global net-zero emissions target by 2050, annual investments in the energy transition should average $5.6 trillion per year between 2025 and 2030. The current investment level is therefore well below the required value.
Financing and Future Forecasts
In 2024, investments in the clean energy technology supply chain, including device manufacturing and raw material extraction for batteries, slightly decreased to $140 billion. Projections for 2025 suggest a rise to $164 billion. Meanwhile, capital funding for climate tech companies decreased by 40% to $50.7 billion, marking the third consecutive year of declines. However, debt related to energy transition rose by 3% year-on-year, reaching $1 trillion.
Source: renewablesnow.com