Global investment in clean energy is on course to rise to USD 1.7 trillion in 2023, with solar set to eclipse oil production for the first time Investment in clean energy technologies is significantly outpacing spending on fossil fuels as affordability and security concerns triggered by the global energy crisis strengthen the momentum behind more sustainable options, according to a new IEA report. About USD 2.8 trillion is set to be invested globally in energy in 2023, of which more than USD 1.7 trillion is expected to go to clean technologies – including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps – according to the IEA’s latest World Energy Investment report. The remainder, slightly more than USD 1 trillion, is going to coal, gas and oil. Annual clean energy investment is expected to rise by 24% between 2021 and 2023, driven by renewables and electric vehicles, compared with a 15% rise in fossil fuel investment over the same period. But more than 90% of this increase comes from advanced economies and China, presenting a serious risk of new dividing lines in global energy if clean energy transitions don’t pick up elsewhere. “Clean energy is moving fast – faster than many people realise. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA Executive Director Fatih Birol. “For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.” Led by solar, low-emissions electricity technologies are expected to account for almost 90% of investment in power generation. Consumers are also investing in more electrified end-uses. Global heat pump sales have seen double-digit annual growth since 2021. Electric vehicle sales are expected to leap by a third this year after already surging in 2022. Clean energy investments have been boosted by a variety of factors in recent years, including periods of strong economic growth and volatile fossil fuel prices that raised concerns about energy security, especially following Russia’s invasion of Ukraine. Enhanced policy support through major actions like the US Inflation Reduction Act and initiatives in Europe, Japan, China and elsewhere have also played a role. Spending on upstream oil and gas is expected to rise by 7% in 2023, taking it back to 2019 levels. The few oil companies that are investing more than before the Covid-19 pandemic are mostly large national oil companies in the Middle East. Many fossil fuel producers made record profits last year because of higher fuel prices, but the majority of this cash flow has gone to dividends, share buybacks and debt repayment – rather than back into traditional supply. Nonetheless, the expected rebound in fossil fuel investment means it is set to rise in 2023 to more than double the levels needed in 2030 in the IEA’s Net Zero Emissions by 2050 Scenario. Global coal demand reached an all-time high in 2022, and coal investment this year is on course to reach nearly six times the levels envisaged in 2030 in the Net Zero Scenario. The oil and gas industry’s capital spending on low-emissions alternatives such as clean electricity, clean fuels and carbon capture technologies was less than 5% of its upstream spending in 2022. That level was little changed from last year – though the share is higher for some of the larger European companies. The biggest shortfalls in clean energy investment are in emerging and developing economies. There are some bright spots, such as dynamic investments in solar in India and in renewables in Brazil and parts of the Middle East. However, investment in many countries is being held back by factors including higher interest rates, unclear policy frameworks and market designs, weak grid infrastructure, financially strained utilities, and a high cost of capital. Much more needs to be done by the international community, especially to drive investment in lower-income economies, where the private sector has been reluctant to venture. To help address this, the IEA and the IFC will on 22 June release a new special report on Scaling Up Private Finance for Clean Energy in Emerging and Developing Economies. Fonte: https://www.iea.org/news/clean-energy-investment-is-extending-its-lead-over-fossil-fuels-boosted-by-energy-security-strengths

Key to the fight against global warming are the many technologies, old and new, that can help abate the emission of greenhouse gases (GHGs) across every industry. According to our analysis, existing technologies can address about 45% of the 51 gigatons of CO2 equivalent (CO2e) GHGs emitted annually around the world. The remaining 55% must be mitigated in large part through implementation of new green technologies—approaches that range from low-carbon hydrogen and biofuels to carbon capture, utilization, and storage (CCUS). If these technologies are to play an essential role in mitigating GHG emissions and helping countries meet their Paris Agreement goal of limiting global warming to well below 2° Celsius above preindustrial levels and pursue efforts to further limit the temperature increase to 1.5°C, they must achieve mass industrialization two to four times faster than did earlier green technologies such as solar photovoltaic and onshore wind. Two challenges stand in the way of achieving these results. The first is the need to reduce what Bill Gates in his book How to Avoid a Climate Disaster termed the green premium: the added cost of low-carbon technologies compared with technologies based on fossil fuels—synthetic aviation fuels versus traditional petroleum-based jet fuel, for example. Already, countries with favorable green energy costs and subsidy schemes have significantly reduced the green premium, due in large part to the surge in energy prices as the COVID-19 pandemic subsides and the war in Ukraine roils energy markets. Recent favorable policies such as the US’s Inflation Reduction Act and the recently adopted reforms of the EU’s Emissions Trading System are likely to enable other markets to reach green parity sooner than previously expected. This amplifies the importance of shifting the focus to the second challenge: scaling up green technologies for mass industrialization within the limited time that remains. Doing so will require an unprecedented effort to overcome six major hurdles, from developing mass manufacturing processes to fully integrating them into end markets. Besides reducing the threat of climate disaster, succeeding at this endeavor will unlock business opportunities worth up to $25 trillion between now and 2040 for the companies involved. In our view, only by assembling entire ecosystems of complementary organizations—including incumbent industry players, green tech startups, industry associations, educational institutions, and public bodies—can the global community overcome the remaining hurdles and enable critical green technologies to deliver their full potential to mitigate GHGs. The Industrialization Imperative The math is simple: the green technologies now being scaled up around the world—including renewable energy generated by solar and wind, heat optimization and recovery, electrical efficiency, operations optimization, and natural carbon sequestration—have the potential to reduce only about 23 gigatons of CO2e per year—45% of the 51 gigatons of CO2e currently being released into the atmosphere every year. To reach net zero goals, countries must eliminate or offset the remaining 28 gigatons of CO2e per year. This will require changes in both energy consumption and energy production. On the consumption side, this entails reducing demand for the fossil fuels that drive GHG emissions. On the production side, it involves developing and bringing to market eight categories of new green technologies: low-carbon hydrogen and synfuels, bioenergy, carbon removal, CCUS, energy storage, green building technologies, distributed energy, and green factory technologies. Each of these technology categories holds considerable promise for carbon reduction. For example, low-carbon hydrogen, when fully adopted, has the potential to reduce around 25% of the total gap through a range of applications, including heavy road transport, mining equipment, aviation, and steel. (See Exhibit 1.) These applications are at different stages of maturity, but none of them are mature enough to support mass industrialization. Bioenergy and green building technology, for example, have already reached the early adoption stage, while carbon removal and most green factory technologies are still at the prototype stage. (See Exhibit 2.) The path to mass industrialization will be rough, especially for the least mature technologies. If these technologies are to play a meaningful role in reducing GHG emissions by 2030, they must be scaled up to achieve capacity levels far greater than they currently possess. And they must reach those capacity levels and be brought to market within the next three to seven years—a time interval two to four times shorter than the ones previous green technologies required. As an example, consider electrolyzers, which are essential for producing the low-carbon hydrogen needed as an input in refining, fertilizers, iron and steel manufacturing, as a feedstock for the fuel cells and synfuels needed to transform the transport sector, and elsewhere. If this technology is to contribute significantly to meeting the Paris Agreement targets, it must achieve mass industrialization within the next three years—more than four times as fast as the time needed to bring solar power to market. And by 2030 it must expand its hydrogen production capacity to an amount 600 times greater than its current level. (See Exhibit 3.) By comparison, solar power took 19 years to achieve that level of increased capacity, and onshore wind took more than 26 years. Direct air capture (DAC) technology—a method of capturing CO2 directly from the atmosphere and then storing or using it in industrial processes—presents an even greater challenge. DAC has the potential to massively reduce the quantity of GHGs already present in the atmosphere. According to the International Energy Agency, DAC must be ready to capture about 87 megatons of CO2 every year by 2030, and 983 megatons by 2050, to meet global carbon abatement goals. But DAC is still in its infancy, and reaching the projected figures would require scaling deployment over today’s levels by a factor of about 9,000 by 2030. (See Exhibit 4.) Even factoring in the commitments that the largest DAC players have made, the effort would fall short by roughly 70 megatons. So to reach the goal, DAC must be industrialized at five times the pace currently anticipated. What stands in the way of mass production and market acceptance of these new technologies? And how can countries reduce mass industrialization enough to slow the rate of global warming? The