Global investment in the energy transition totaled $755 billion in 2021

Global investment in the energy transition totaled a record
$755 billion in 2021, supported by growing climate ambition and policy action from countries around the world, according to a new report released by Bloomberg New Energy Finance (BNEF).

Investment increased in almost all areas covered by the report, including renewable energy, energy storage, electrified transportation, electrified heat, nuclear, hydrogen and sustainable materials, with the exception of a decline in carbon capture and storage (CCS
).

Renewables, including wind, solar and other renewables, remain the largest investment area, reaching a new record of $366 billion in 2021, up 6.
5%
year-on-year, according to the report.

Electrified transportation, which includes electric vehicles and related infrastructure spending, is the second largest sector with an investment of $273 billion
.
With EV sales soaring, the industry grew at a staggering rate of 77% in 2021 and could overtake renewables
in 2022 (in dollar terms).

Clean energy and electrification (including renewables, nuclear, energy storage, electrified transportation, and electrified heating) accounted for the vast majority of total investment, at $731 billion
.
Hydrogen, carbon capture and storage, and sustainable materials make up the rest, totaling $24 billion
.

Albert Cheung, head of analysis at BNEF, said: "The global commodity crunch has created new challenges for the clean energy industry, raising the cost
of inputs for key technologies such as solar modules, wind turbines and battery packs.
Against this backdrop, the 27% increase in investment in the energy transition in 2021 is an encouraging sign that investors, governments and businesses are more committed than ever to the low-carbon transition as part of the solution
to the current energy turmoil.
”

The three investment regions, namely Asia Pacific (APAC), Europe, Middle East and Africa (EMEA) and the Americas (AMER), are both the largest regional markets for investment at $368 billion (almost half of the global total) and the region with the highest growth rate of 38%
in 2021.

In 2021, investment in the energy transition in EMEA grew by 16% to $236 billion, EU member states to $154 billion, and investment in the Americas increased by 21% to $150 billion
.

China is once again the single largest country for investment in the energy transition, committing US$266 billion
in 2021.
The United States ranked second with $114 billion, with Germany, the United Kingdom and France among the top five countries for investment in the energy transition
.
In terms of levels of investment in the energy transition, Asia-Pacific countries currently occupy four of the top 10 positions, with India and South Korea closely behind
China and Japan.

The report also found that climate technology companies raised a total of $165 billion
in 2021.
Such investments are not included in the $755 billion, reflecting new equity financing
raised by companies in the climate technology sector from public markets or private investors.
The funds will be used in the coming years to expand the businesses of these companies and further develop their technology
.

Claire Curry, Head of Technology and Innovation at BNEF, said: "Companies have never had so much money available to tackle the most difficult aspects of the climate challenge
.
It's true that we're ready to deploy solutions today, but we still need to continue to innovate
.
Over the next decade, all forms of corporate finance will play an important role
in helping to develop and scale up climate technologies.
”