Spending on the global transition to carbon-free forms of energy totaled at least $1.1 trillion in 2022, a new report found, Andrew writes.

  • This is the first time that funding to deploy technology such as renewables and electric vehicles topped the trillion-dollar mark.

The big picture: The analysis, out this morning from BloombergNEF, shows that while global energy transition investment jumped 31% between 2021 and 2022, it needs to be far higher to get the world on a path to net zero emissions by 2050.

  • To be consistent with a net zero pathway, global annual energy transition funding needs to average about $4.55 trillion from 2023 through 2030.
  • And during the 2030s, annual investment would need to push even higher, to $6.88 trillion.

Zoom in: Renewable technologies attracted the most spending last year, at $495 billion. Electrified transport, which includes EVs and charging stations, is nipping at its heels, having climbed 54% in just one year.

  • China is significantly outspending every other country, at about $546 billion, which is a bit less than half of all global energy transition investment.
  • The U.S. ranks a distant second.

Of note: In 2022, energy transition spending for the first time equaled funding for fossil fuels, the report shows.

  • As recently as 2019, there was a $400 billion gap between the two, with money for deploying new fossil fuel facilities in the lead.

Between the lines: While funding is short of where it needs to be for a net zero scenario, the boost compared to 2021 is significant, especially considering it took place in a year of energy market turmoil due to Russia’s invasion of Ukraine.

  • The conflict incentivized some European nations reliant on Russian natural gas, such as Germany, to seek alternative supplies. This has led to the building of new fossil fuel infrastructure.
  • But the war has also dramatically sped up the European Union’s plans to get off fossil fuels altogether just as the U.S. passed landmark policies favoring renewables.

What they’re saying: “Our findings put to bed any debate about how the energy crisis will impact clean energy deployment,” said Albert Cheung, head of global analysis at BloombergNEF, in a statement.

  • “Investment in clean energy technologies is on the brink of overtaking fossil fuel investments, and won’t look back.”

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