Global investment in the energy transition totalled $755bn in 2021, setting a new record, according to BloombergNEF (BNEF).
BNEF’s ‘Energy Transition Investment Trends 2022’ report found investment rose in almost every sector covered in the report, including renewable energy, energy storage, electrified transport, electrified heat, nuclear, hydrogen and sustainable materials.
Renewable energy, which includes wind, solar and other renewables, remains the largest sector in investment terms, achieving a new record of $366bn 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 $273bn 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.
Only carbon capture and storage (CCS) recorded a dip in investment, though there were many new projects announced in the year.
Energy Transition Investment Trends is BNEF’s annual accounting of how much businesses, financial institutions, governments and end-users are committing to the low-carbon energy transition.
Together, clean power and electrification (comprising renewables, nuclear, energy storage, electrified transport and electrified heat) accounted for the vast majority of investment at $731bn.
Hydrogen, carbon capture and storage and sustainable materials made up the rest, totalling $24bn.
Albert Cheung, head of Aanalysis at BloombergNEF, said: “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.
“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 $368bn (nearly half the global total), and the region with the highest growth at 38% in 2021.
Energy transition investment in EMEA grew by 16% in 2021, reaching $236bn, while the Americas saw investment grow by 21% to $150bn.
China was again the largest single country for energy transition investment, committing $266bn.
The US was in second place with $114bn.
Germany, the UK and France rounded out the top five countries for energy transition investment in 2021.