Global energy transition investment rose to record levels in 2024, Bloomberg New Energy Finance (BNEF) says in a report published today, but growth was centred on proven technologies and the amount put into emerging sectors declined.
Overall investment in the energy transition reached almost $2.1 trillion last year, BNEF says, an increase of 11pc from 2023 and the highest ever.
But the increase was markedly smaller than the 24-29pc annual growth recorded over the previous three years. And investment needs to rise to $5.6 trillion/yr in 2025-30, and $7.6 trillion/yr in 2031-35, to align with achieving net zero emissions by mid-century, BNEF says.
About 93pc of energy transition investment last year related to "proven, commercially scalable" technologies, BNEF says, resisting pressure from higher interest rates and policy decisions to rise by 14.7pc to $1.93 trillion. Of these, electrified transport attracted the most investment at $757bn, up by 20pc on the year, followed by renewable energy, up by 8pc to $728bn, and power grids, up by 15pc to $390bn.
But investment in emerging technologies fell by 23pc on the year to $154bn. Carbon capture and storage investment halved to $6.1bn, as did clean industry investment to $27.8bn. And hydrogen investment declined by 42pc to $8.4bn.
BNEF points to issues surrounding technology maturity, scalability and affordability as key hindrances in emerging sectors, flagging the need for public-private partnerships to derisk investment and encourage growth.
The main regional sources of investment shifted in 2024, as mainland China increased its contribution by 20pc to $818bn, investing more than the principal 2023 growth drivers — the EU, US and UK — combined. EU investment fell to $381bn and the UK's to $65.3bn, while the US' held stable at $338bn.
