EU set to trail in cleantech investments, risking energy goals

Chief Europe Correspondent
Source: Rystad Energy • Figures include both private and public investments.

The European Union’s cleantech investments are set to plateau by the end of the decade, putting the bloc’s ambitious energy transition targets at risk, according to an analysis from Oslo-based consultancy Rystad Energy. 

Rystad looked at the EU’s clean-technology capital expenditures, which refers to spending by a company to acquire, upgrade and maintain physical assets like manufacturing plants, technology or equipment. 

The bloc’s capital investments in clean technologies — including renewables, carbon capture, utilization and storage, hydrogen, batteries and nuclear power — totaled $125 billion in 2023. China, by comparison, spent $390 billion last year. The United States is currently behind the EU in annual cleantech spending, having invested just $86 billion in 2023. But the 2022 Inflation Reduction Act is set to stimulate U.S. investments; such expenditures are expected to equal and then surpass the EU’s clean energy spending after 2030.  

“While the EU has set ambitious cleantech goals, they face various challenges related to policy uncertainty, supply chain vulnerabilities, high energy costs, skills gaps, and competitiveness issues, which are expected to limit the growth of clean tech investments in the region,” said Lars Nitter Havro, senior analyst for energy systems at Rystad Energy. 

Building a globally competitive cleantech industry has shot to the top of the EU agenda in recent months. The new European Commission (its formation is currently under negotiations following the June European elections) is expected to propose a so-called competitiveness deal to both complement the European Green Deal and to foster homegrown technological advancements.