$1.1trn Renewable Energy Investment Matched Spending on Fossil Fuels in 2022

Emmanuel Addeh in Abuja

For the very first time in history, investment in low-carbon energy technologies worldwide was equal to money spent on fossil fuels, according to BloombergNEF, a global strategic research service provider.

The amount of investment in cleaner energy technology in 2022 was $1.1 trillion, a study by the organisation noted. This came despite an uptick in spending on fossil fuels as many regions focused their attention on energy security, it added.

Investment towards energy transition grew by $261 billion from the previous year — a 31 per cent increase from 2021. But the investment in fossil fuels was also simultaneously up $214 billion over 2021 levels, the report stated.

“The growth in fossil fuel investments in 2022 occurred against the backdrop of high commodity prices, with many oil and gas majors earning record profits. Increased climate awareness has, however, made these companies more focused on share buybacks and diversifying to lower-carbon assets,” the researchers explained.

The historic shift in investment trends cannot be reversed, as low-carbon industries are on the upward trend, despite clean energy supply not yet being a match for fossil fuels, the authors added.

The trillion-dollar investment in energy transition included renewables (solar, wind, nuclear), storage, charging infrastructure, hydrogen production, and carbon capture, utilisation, and storage. It also included tech such as small-scale solar, heat pumps, and zero-emission vehicles.

The researchers broke down the investment into various categories: Renewable energy remained the largest sector at $495 billion (up 17 per cent year-on-year) and electrified transport was growing much faster and hit $466 billion (up 54 per cent).

While supply chain disruption and inflation may have posed initial hurdles in 2020 and 2021, these factors did not come in the way of countries investing heavily in clean energy, the authors noted.

Other than nuclear power, which did not see much growth in the last year, all the other sectors surpassed record levels of investment. Electrified heat received $64 billion, energy storage investment reached $15.7 billion and carbon capture and storage hit $6.4 billion, the findings in the report showed.