Clean-energy investment set to double fossil fuel financing in 2025, IEA says

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🗞️ Driving the news: Global clean-energy investment is projected to reach $2.2 trillion in 2025 — double the amount expected for fossil fuels, according to a new International Energy Agency (IEA) report
• Solar energy alone is forecasted to attract $450 billion, the largest single item in global energy spending
• Despite geopolitical disruptions and market volatility, renewables continue to dominate capital flows in the energy sector

🔭 The context: Clean-energy investment has surged globally over the past decade, largely driven by falling technology costs, policy shifts, and the urgent need to meet climate goals
• China is now the dominant investor, surpassing the combined spending of the U.S. and EU
• While investments in nuclear are also increasing—with over $70 billion anticipated this year — coal-fired power plant approvals rose sharply in 2024, especially in China and India, raising concerns about backsliding on emissions

🌍 Why it matters for the planet: The shift in investment toward renewables signals progress toward decarbonization, particularly in emerging markets now benefiting from low-cost solar imports
• However, persistent high fossil fuel investments and rising coal approvals jeopardize net-zero ambitions
• Without a tripling of investments in efficiency and electrification, countries risk falling short of the energy intensity targets set at COP28

⏭️ What's next: The IEA stresses that current investment levels are insufficient to meet climate goals
• A significant scale-up in funding for energy efficiency and electrification is needed to achieve a 4% annual improvement in energy intensity by 2030
• Policymakers and financial institutions will face mounting pressure at upcoming forums — such as the 2025 UN Climate Summit — to close the gap between pledges and capital flows
• Private sector caution around new fossil fuel investments suggests a potential shift in long-term priorities

💬 One quote: “China is the single most important driver of global energy investments in many areas, from clean energy, such as solar, to coal.” — Fatih Birol, Executive Director, IEA

📈 One stat: In early 2025, Chinese solar exports to developing countries surpassed those to advanced economies, with Pakistan alone importing 19 GW — equal to half its national grid capacity

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