Investments in cleaner energy are on the verge of surpassing fossil fuel spending for the first time after surpassing $1 trillion last year, a report on Tuesday said.
Despite the milestone, spending on energy transition technologies must immediately triple to meet net-zero emissions targets by 2050 to combat climate change, according to research group BloombergNEF.
Increasingly driven by the Russian-Ukrainian war
Investments in sectors such as renewable energy, nuclear, zero-emission vehicles or recycling projects totaled $1.1 trillion last year, matching spending on fossil fuels, the report found.
This is up 31 percent on the previous year, and marks the first time total investment has been measured in trillions.
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The increase was driven by the energy crisis that followed Russia’s invasion of Ukraine, the report said.
“Investment in clean energy technology is on the brink of overtaking investment in fossil fuels, and will not look back,” said Albert Cheung, head of global analysis at BloombergNEF.
China – the world’s biggest polluter – is the biggest investor in the energy transition, with the United States in second place.
Nearly half of total global investment is in China, particularly in steel recycling and the renewable energy and electric vehicle sectors.
Germany has retained its place in third place, largely due to its sizable EV market.
But the drop in offshore wind deals saw investment in Britain fall by nearly a fifth, the report found.
Energy transition technology
Globally, renewable energy is the largest investment sector at $495 billion, followed by electric transportation projects.
With the exception of nuclear power, the researchers said that all other sectors are seeing a level of investment.
Growth in energy transition technologies also comes as many countries see increased investment in fossil fuels in an effort to maintain energy security.
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The war in Ukraine has led to disruptions in global electricity supplies as Russia, a major producer of fossil fuels, cuts gas supplies to European Union countries and faces sanctions over the invasion.