IEA: 2023 fossil fuel investment will surpass $1 trillion

The International Energy Agency (IEA) has projected that global investment in energy will reach approximately $2.8 trillion in 2023, with over $1.7 trillion of that dedicated to clean energy technologies like electric vehicles (EVs), renewables, and energy storage. While this is a positive development for advocates of sustainable energy, the report also highlights that coal, gas, and oil are still expected to attract over $1 trillion of investment this year, far exceeding the levels needed for a net-zero emissions scenario by 2050.

The IEA’s World Energy Investment report underscores the misalignment between current fossil fuel investment levels and the goals of the Paris Agreement. The continued reliance on fossil fuels contributes significantly to climate change, and limiting global warming to well below 2 degrees Celsius requires a rapid transition away from these sources.

Despite growing concerns about the environmental impact of fossil fuels and calls to abandon fossil fuel finance, the oil and gas industry continues to pursue projects globally. However, the report also highlights a significant shift in investment trends. The IEA’s executive director, Fatih Birol, notes that clean energy is outpacing fossil fuels in terms of investment. For every dollar invested in fossil fuels, approximately $1.7 is now being allocated to clean energy, compared to a one-to-one ratio just five years ago. Solar energy, in particular, is set to surpass investment in oil production for the first time.

While the report highlights the progress being made in clean energy investment, it also emphasizes the urgent need to redirect financial resources away from fossil fuels and towards sustainable alternatives to accelerate the transition to a low-carbon future.