Energy Transition Factbook Prepared for the 14th Clean Energy Ministerial Cover letter It is my pleasure to share with you the Energy Transition Factbook, which illustrates the critical progress the world is making in transitioning to net-zero emissions – and identifies key trends in the development and deployment of clean energy, including wind power, photovoltaics, electric vehicles, and technologies in earlier stages of development, such as hydrogen and sustainable aviation fuel. There have been encouraging developments since last year’s factbook. Global clean energy investment topped $1.1 trillion in 2022. Global electric vehicle sales exceeded 10 million in 2022 for the first time, and more than one in 10 cars sold today are fully electric or hybrid. The US began implementing the Inflation Reduction Act, the single largest financial commitment in its history to address climate change, which has helped to accelerate investment in new clean energy and EV manufacturing. This progress has also been shaped by energy security concerns arising from Russia’s invasion of Ukraine, since clean energy can allow nations to become more energy self-sufficient, while also driving economic growth and improving public health by reducing air pollution. Much work remains, of course. Wealthy nations must do more to support developing nations in expanding access to clean, affordable energy. In some nations, market barriers remain prevalent, making it more difficult for businesses and consumers to move to cleaner fuels. But momentum is building toward a future powered by clean energy. This factbook, using research from BloombergNEF and other sources, provides public and private sector leaders the critical information they need to accelerate the transition to clean energy, along with all the health and economic benefits it will bring. Michael R. Bloomberg Founder, Bloomberg L.P. Founder, Bloomberg Philanthropies UN Secretary-General’s Special Envoy for Climate Ambition and Solutions 1 Introduction: Energy transition in 2022 2 3 Power sector: Renewables, integration, storage, grids 19 Transport: Electrification, heavy-duty transport 33 Industry: Decarbonizing hard-to-abate sectors, hydrogen 44 Finance: Asset investment, green bonds, ESG 53 Energy transition investment in CEM members surged to over $1 trillion in 2022 CEM members’ annual energy transition investment Energy transition investment ($ billion), historic 1200 1,017 1000 760 800 420 463 400 200 141 550 600 127 80 100 98 174 183 191 2018 2019 2020 546 321 0 2021 2022 Indonesia Mexico United Arab Emirates New Zealand Russia Chile Other Portugal Denmark Finland Poland Other EU Norway Sweden Australia Netherlands Canada Brazil Italy Spain India South Korea Japan UK France Germany US Mainland China Source: BloombergNEF. Note: ‘Other EU’ includes European Commission members that do not hold individual CEM membership status. 3 Between them, Clean Energy Ministerial members, including the European Union, attracted $1 trillion in investment for energy transition technologies in 2022 – a new record. This marked a 34% jump from the previous record of $760 billion, reached in 2021, and included major investment in renewables, power storage and electric vehicles. Collectively, the members again account for 91% of all energy transition investment worldwide. Among individual CEM members, mainland China continues to attract the most investment, followed by the US and Germany. Investment in mainland China spiked 70% year-on-year to $546 billion. Investment also jumped 11% in the US (to reach $141 billion) and 9% in Germany (to $55 billion). Nine in 10 dollars invested went to renewables or electrified transport CEM members’ annual energy transition investment Energy transition investment ($bn) 1200 Hydrogen 1,017 1000 CCS Energy storage Sustainable materials 760 800 Nuclear 448 550 600 420 463 Electrified transport 289 Renewable energy 400 116 Electrified heat 118 200 157 314 368 244 280 2018 2019 2020 2021 442 Investment in electrified transport in 2022 jumped more than 54% from the year prior, to $448 billion. Transport and renewables were nearly 90% of 2022 investment. Surging investment in EV supply chains and growing purchases of EVs from consumers allowed the electrified transport segment surge. Investment jumped by $158 billion and global EV sales totaled over 10 million. Renewables was the second largest sector