Bloomberg NEF Reports Low-Carbon Investments Sets New Record in 2021 - Smart Energy Decisions

GHG Emissions  -  January 27, 2022

Bloomberg NEF: Low-Carbon Investments Set New Record

Global investments in energy transition totaled $755 billion in 2021, reaching a new record, according to Energy Transition Investment Trends 2022, a new report published by research firm BloombergNEF (BNEF).

The number of investments increased in nearly all sectors, including renewable energy, energy storage, electrified transport, electrified heat, nuclear, hydrogen, and sustainable materials. The only investments that declined were carbon capture and storage (CCS) even as many new projects were announced.

Renewable energy remains the largest sector for investments and reached $366 billion in 2021, up 6.5% from the year prior. Electrified transport, which includes spending on EVs and associated infrastructure, was the second-largest sector with $273 billion invested. The number of EV sales surged and  grew at a breakneck rate of 77% in 2021.

Clean power and electrification (consisting of renewables, 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, totaling $24 billion.

“The global commodities crunch has created new challenges for the clean energy sector, raising input costs for key technologies like solar modules, wind turbines, and battery packs,” said Albert Cheung, Head of Analysis at BloombergNEF. “Against this backdrop, a 27% increase in energy transition investment in 2021 is an encouraging sign that investors, governments, and businesses are more committed than ever to the low-carbon transition, and see it as part of the solution for the current turmoil in energy markets.”

Asia Pacific (APAC) was both the largest region for investment at $368 billion (nearly half the global total) and the region with the highest growth at 38% in 2021. Energy transition investment in Europe, Middle East & Africa (EMEA) grew by 16% in 2021, reaching $236 billion, while the Americas saw investment grow by 21% to $150 billion.

China was again the largest single country for energy transition investment, committing $266 billion in 2021. The U.S. was in second place with $114 billion, though EU member states as a bloc committed more at $154 billion. Germany, the U.K., and France rounded out the top five countries for energy transition investment in 2021.

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