Investment in the global energy transition reached unprecedented levels last year, with total financing surpassing $2 trillion for the first time. Reports from BloombergNEF, particularly their annual 'Energy Transition Investment Trends 2025' document, show investment increasing by 11% year-on-year, culminating at $2.1 trillion. While this growth rate is encouraging, it remains significantly lower than the explosive growth seen between 2021 and 2023 when investments spiked between 24% and 29% annually.
Driving the investment surge was electrified transport, which attracted $757 billion, accounting for around 36% of the total funding. Renewable energy, too, saw substantial backing, pulling in $728 billion, and power grids captured $390 billion. Notably, the report highlights the stagnation of investments within segments classified as 'emerging technologies'—including hydrogen, carbon capture, and clean shipping—which collectively secured only $155 billion. This figure marks a 23% decline compared to the previous year, highlighting challenges facing unproven technologies.
Geographically, mainland China dominated investment, contributing $818 billion, which represented over 38% of the total global investment. This was up 20% from 2023, exemplifying China’s commitment to clean technology development. Conversely, investment levels were stagnant in the United States at $338 billion, with reductions noted across the European Union and the United Kingdom, measuring at $381 billion and $65.3 billion respectively. Together, the U.S., EU, and UK fell short when compared against China’s monumental contributions.
The report also stresses the widening ‘investment gap’ necessary to reach net-zero targets by 2050 as set out by the Paris Agreement. For the world to stay on track, it would require average annual investments of $5.6 trillion from 2025 to 2030. Data from BloombergNEF indicates the current investment levels represent only 37% of what's needed. This gap serves as both a challenge and a clarion call for the public and private sectors to collaborate more closely.
Albert Cheung, Deputy CEO of BloombergNEF, commented, "There is still much more to be done, especially in areas like industrial decarbonization, hydrogen, and carbon capture, to reach global net-zero goals." Addressing the investment gap will require targeted strategies to de-risk developing technologies, incentivizing funding from both sectors. These findings challenge governments to reassess their approaches to achieving energy transition objectives and unlocking potential investments.
On the subject of supply chain investments, BloombergNEF reported a slight decrease to $140 billion, yet projections suggest growth to $164 billion in 2025. Batteries emerged as the primary focus, consuming 60% of supply-related investments due to the high capital intensity of battery manufacturing.
Meanwhile, the European Investment Bank announced increased financing for energy transition and sustainability, reaching €50.7 billion ($52.8 billion), representing 57% of its total financing for 2024. Such initiatives mark continuing commitment among institutions to bolster green finance as the bank aims for significant climate-related investments through to 2030.
Overall, as we move forward, substantial concerted efforts will be necessary among countries and corporations alike. The steps required to turn the tide on climate change hinge on elevative financing practices and innovative policies. With the world at only 37% of its necessary investment levels, strategic re-alignments are pivotal. New funding channels alongside dedicated governmental action are imperative to overcoming the barriers facing the energy transition.
The clock is ticking toward 2050. The ramifications of maintaining the status quo could prove detrimental to achieving net-carbon neutrality, necessitating immediate action, collaboration, and funding to pave the way toward the low-carbon future the world desperately needs.