Global investment in the energy transition reached a historic $2.3 trillion in 2025, according to the latest data from BloombergNEF. This record-breaking figure encompasses expenditures on solar panels, wind turbines, electric vehicles, and power grid expansions. While clean energy spending surpassed fossil fuel investments for the second consecutive year, the annual growth rate has slowed to 8%. Despite fluctuating market conditions and a slight dip in specific renewable sectors, the global momentum toward a decarbonized economy remains robust, driven by surging electricity demand and technological cost reductions.
The shift toward a sustainable energy future is accelerating, evidenced by the massive capital flows currently entering the sector. Research indicates that global spending on carbon-free technologies hit an all-time high last year, covering a broad spectrum of industries including energy storage, battery manufacturing, and the modernization of electrical grids. This surge is largely fueled by the increasing affordability of wind and solar power, alongside a desperate need for grid upgrades to accommodate the massive energy requirements of the artificial intelligence boom.
For the second year in a row, the financial commitment to clean energy and infrastructure surpassed the total capital allocated to fossil fuel supplies. Interestingly, investment in the fossil fuel sector saw its first decline since 2020, dropping by approximately $9 billion compared to the previous year. This shift highlights a fundamental change in how global investors view long-term energy security and profitability.
However, the report also highlights some emerging challenges. Although the total investment figure is higher than ever, the pace of growth is decelerating. The 8% increase recorded in 2025 is a significant step down from the 12% growth seen in 2024 and the 22% spike in 2023. Furthermore, capital specifically directed toward renewable energy projects fell by nearly 10%, a trend experts attribute to regulatory changes and market uncertainty within China.
Despite these headwinds, China remains the world’s dominant force in energy transition spending, followed by the European Union and the United States. In markets like Norway and China, electric vehicles are rapidly displacing traditional internal combustion engines, often due to aggressive government incentives or lower comparative costs. While the transition faces short-term hurdles, the overarching trajectory suggests a permanent pivot away from traditional energy sources as the world prioritizes decarbonization and electrification.