E-mobility was the largest sector for energy transition investments in 2023, growing 36% on-year, according to the latest BloombergNEF report.

Global investment in low-carbon energy transition rose 17% last year to a record $1.77 trillion, the Energy Transition Investment Trends 2024 report estimates. Renewable energy, electric vehicles, hydrogen and carbon capture drove the year-on-year growth, with China leading the investments with $676 billion spending, accounting for 38% of the total global investments in the year.

The US also saw strong growth, with investments reaching $303 billion, thanks primarily to the Inflation Reduction Act (IRA), while Europe witnessed the fastest growth, with a combined $340 billion in spending. Within Europe, Germany, the UK, and France led the growth with investments of $95.4 billion, $73.9 billion, and $55.5 billion, respectively.

Notably, the European Union, the US and the UK together invested more than China with a combined $718 billion in investments. While the Asia Pacific has been driving global energy transition growth over the past several years, the growth eased last year, increasing only 7% y-o-y. BNEF attributes this drop to slowing renewable energy investments, which fell 9% to $331 billion amid a slowdown in China, Kallanish notes.

“Strong growth in the US and Europe drove the global rise, even as China, the world’s largest renewables market, sputtered, recording an 11% drop,” says Meredith Annex, BNEF’s head of clean power.  

Electrified transport surpassed the renewable energy sector in investments, with spending reaching $634 billion in the year, including on electric cars, buses, two- and three-wheelers, commercial vehicles, and associated infrastructure. Investments in hydrogen also grew significantly, tripling y-o-y to $10.4 billion, while energy storage rose 76% to $36 billion.

However, “the current level of investment in clean energy technologies is not nearly sufficient to set the world on track for net zero by mid-century,” BNEF warns. Investments would need to reach an average of $4.8 trillion per year – nearly thrice the 2023 investments – from now to 2030 to align with BNEF’s net zero scenario.

“Our report shows just how quickly the clean energy opportunity is growing, and yet how far off track we still are,” adds Albert Cheung, deputy ceo of BNEF. “Energy transition investment spending grew 17% last year, but it needs to grow more than 170% if we are to get on track for net zero in the coming years. Only determined action from policymakers can unlock this kind of step-change in momentum.”