A recent report by Bloomberg (BNEF) states that global investment in the energy transition totalled $755 billion in 2021 – a new record – off the back of rising climate ambitions and policy action from countries around the world.
According to BNEF, investments rose in almost every sector covered in the report, including renewable energy, energy storage, electrified transport, electrified heat, nuclear, hydrogen and sustainable materials. Only carbon capture and storage recorded a dip in investment, though there were many new projects announced in the year.
The report points out that renewable energy remains the largest sector in investment terms, achieving a new record of $366 billion committed in 2021, up 6.5% from the year prior. Electrified transport, which includes spending on electric vehicles and associated infrastructure, was the second-largest sector with $273 billion invested.
“With electric vehicle sales surging, this sector grew at a breakneck rate of 77% in 2021 and could overtake renewable energy in dollar terms in 2022,” the report reads.
The report reveals that nuclear, energy storage, electrified transport and electrified heat accounted for the vast majority of investment at $731 billion. Hydrogen, carbon capture and storage and sustainable materials made up the rest, totalling $24 billion.
The report pointed out that Asia Pacific was both the largest region for investment at $368 billion, or nearly half the global total, and the region with the highest growth at 38% in 2021. Europe, the Middle East and Africa grew by 16% in 2021, reaching $236 billion, while the Americas saw investments grow by 21% to $150 billion. “China was again the largest single country for energy transition investment, committing $266 billion in 2021,” the dossier notes. “The United States was in second place with $114 billion, though EU member states as a bloc committed more at $154 billion. Germany, the UK and France rounded out the top five countries for energy transition investment in 2021. Asia-Pacific countries now hold four of the top 10 places in terms of energy transition investment levels, with India and South Korea joining China and Japan.”