Global Low-Carbon Energy Technology Investment Surges Past $1 Trillion for the First Time

LONDON, UK / ACCESSWIRE / January 27, 2023 / Global investment in the low-carbon energy transition totaled $1.1 trillion in 2022 - a new record and a huge acceleration from the year before - as the energy crisis and policy action drove faster deployment of clean energy technologies, according to a new report from research firm BloombergNEF (BNEF). In another first, investment in low-carbon technologies appears to have reached parity with capital deployed in support of fossil fuel supply.

Energy Transition Investment Trends is BNEF's annual accounting of how much funding businesses, financial institutions, governments and end-users are committing to the low-carbon energy transition. Almost every sector covered in the report achieved a new record level of investment in 2022, including renewable energy, energy storage, electrified transport, electrified heat, carbon capture and storage (CCS), hydrogen and sustainable materials. Only nuclear power investment did not set a record, staying broadly flat.

Renewable energy, which includes wind, solar, biofuels and other renewables, remained the largest sector in investment terms, achieving a new record of $495 billion committed in 2022, up 17% from the year prior. However, electrified transport, which includes spending on electric vehicles and associated infrastructure, came close to overtaking renewables, with $466 billion spent in 2022 - an impressive 54% increase year-on-year.

Hydrogen is the sector that received the least financial commitment at just $1.1 billion in 2022 (0.1% of the total), despite strong interest from the private sector and growing policy support. Hydrogen is, however, the fastest-growing sector with investment more than tripling over the year before.

BNEF's data show that China was by far the leading country for attracting energy transition investment, accounting for $546 billion or nearly half of the global total. The US was a distant second at $141 billion, while the EU would have been second if treated as a single bloc, at $180 billion. Germany retained its third place, while the UK dropped one place to fifth as France climbed to fourth.

Transition investment matches fossil fuels for the first time; ramp-up needed for net zero

Within the report BNEF also makes a top-down estimate of global fossil fuel investments, including upstream, midstream, downstream and unabated fossil power generation. This figure, arrived at independently for the purpose of comparison, is estimated at $1.1 trillion in 2022 - the same figure as the energy transition investment total. This marks the first time that global energy transition investment has matched fossil fuel investment, and comes despite fossil investment growth triggered by last year's energy crisis.