Before we get to the five trends we wrote about last January, there’s a big one we didn’t foresee: Russia’s invasion of Ukraine in February.
The resulting and ongoing war has severely exacerbated the energy crisis, which we mentioned as a 2021 trend. The war is permeating virtually every geopolitical debate and is changing the course of history.
In the short-term, the conflict is prompting a rush to secure natural-gas supplies outside of Russia and a resurgence of coal power, particularly within Europe. Longer term, though, it’s hastening the move away from fossil fuels, according to two separate reports from the International Energy Agency in recent months (its annual outlook in October and its renewable energy forecast earlier this month).
Unlike during previous energy crises, many kinds of clean energy are now at a point in their development and affordability where they could realistically replace oil, natural gas and coal.
Our five predicted trends for 2022:
More money, but hopefully not more problems.
This time last year, I said the U.S. Bipartisan Infrastructure Law’s climate and energy funding, which at the time was a record $115 billion, could create headaches for implementation.
The Inflation Reduction Act, whose total funding going toward climate is $369 billion over 10 years, dwarfs all prior investments in this space.
So, I was right about there being more money—but I’m blown away by how much!
The challenges implementing IRA will be similarly supercharged.
Potential issues include hiring enough workers to implement the law quickly enough so companies can take advantage of the law’s time-sensitive incentives. Next year, the law and its proponents will also face Republican scrutiny with the GOP in control of the House of Representatives.
First-of-their-kind projects to the starting line.
I might want to reconsider including this as a trend in the future—unless I want to list it as a trend every year for the next 30 years!
We are seeing a lot of projects—too many to name here—be announced, break ground or commence construction.
A smattering of examples: Lower-carbon hydrogen plants all around the world, including Texas, the Netherlands and the United Arab Emirates; and at least two sustainable aviation fuel plants, including Fulcrum BioEnergy plant in Nevada and LanzaJet’s plant in Georgia that received the first grant from the Catalyst program at Breakthrough Energy (which I mentioned in my 2022 look-ahead piece). Georgia is also fast becoming ground zero for electric-vehicle manufacturing.
Back in January, I mentioned the U.S. State Department’s First Movers Coalition, a group of companies launched in November 2021 supporting cleantech products in eight hard-to-abate sectors, like aviation and manufacturing.
At the annual United Nations Climate Conference of the Parties (known as COP27) in Sharm el-Sheikh, Egypt in November, FMC announced it’s tackling cement too. At next year’s COP28 in Dubai, United Arab Emirates, the group will launch an effort tackling the chemicals sector, a spokesperson said.
Global climate and energy equity.
Progress on this topic has been a mixed bag.
Climate-fueled extreme weather—especially when afflicting low-income nations—received top billing at COP27. World leaders agreed to create the first loss and damage fund wherein wealthy countries pay developing countries to recover from extreme weather events.
While the announcement shows increasing awareness of the effects of climate change, such a fund does not replace the financing developing countries need to continuously adapt to future warming impacts, leaders from developing countries and experts say, as Anca wrote recently.
In my predictions, I wrote I would be looking to see if financial and multilateral institutions from wealthier nations would show leniency on previously announced restrictions on fossil-fuel financing in developing countries.
That seems unlikely from at least one powerful source: the European Investment Bank, according to a September report in The Financial Times.
Despite the restrictions for developing countries like those in Africa, Europe is increasingly turning to African natural gas to make up for its loss of Russian resources.
Such a twist of circumstances provides an ironic backdrop for African leaders to emphasize the importance of developing their economies with natural gas, as Nigeria’s president said in a November Washington Post op-ed and a top United Nations official explained in a Cipher Newsmakers video interview from September.
Whether the VC market cools down.
Venture capital is still pouring into climate technologies, but at a cooler rate than in 2021.
