Spending on Global Energy Transition Well Under What's Needed

Worldwide investment in the transition to low-carbon energy sources topped $2 trillion for the first time last year, according to a new report.

That might sound like a positive result, but it’s still well under what’s needed, experts say.

Countries and companies all over the world are investing in and developing cleaner sources of power and infrastructure to meet climate targets under the Paris Agreement, however experts say that figure, from research provider BloombergNEF on Thursday, needs to be cranked up signifcantly.

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Current investment levels are only 37% of what is required to get on track, BloombergNEF’s energy annual investment trends report said.

The global energy transition needs to average $5.6 trillion each year from 2025 to 2030 to meet a net zero emissions target by mid-century.

Investment in the low-carbon energy transition grew by 11% last year to a record $2.1 trillion, driven by renewable energy, power grids and electrified transport and energy storage investment, according to the report.

The world’s biggest solar farm, spread over 200,000 acres, seen in China’s Xinjiang — The global energy transition is the biggest business event of the decade, and possibly the century. This pic shows the world’s largest solar farm, spread over 200,000 acres, in Xinjiang. Photo: China Daily.

Pace of growth slowing

However, the pace of growth was slower than in the previous three years when investment grew by 24-29% a year.

The largest market for investment was mainland China, which accounted for $818 billion of investment, up 20% from 2023.

One of US President Donald Trump’s first acts on returning to office last week was to quit the Paris Climate Agreement, which will slow US climate funding internationally and increase the chance of global warming escalating.

“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,” Albert Cheung, deputy chief executive of BloombergNEF, said.