As global energy transition efforts intensify, China’s leading role becomes increasingly apparent. According to reports from the China Energy News at the inaugural Bloomberg New Energy Finance summit in Beijing, China is set to continue its pivotal role in driving energy transformation. Jon Moore, CEO of Bloomberg New Energy Finance, stated, “In the global push for energy transition, whether it’s clean energy development represented by wind and solar, or investments in climate technology and green finance products, China is the dominant player.”
Experts at the summit shared a consensus on the outlook for energy transition, emphasizing that it is entering a critical phase. China’s energy transition is expected to shift from a focus on quantity to one of quality. While the development of wind and solar technologies progresses steadily, the scale effects of the hydrogen energy industry are also becoming increasingly pronounced, positioning China as a global leader in the hydrogen economy.
China remains the largest investor in energy transition globally. In 2024, global energy transition investments are projected to reach $2.083 trillion, marking the first time this figure surpasses the $2 trillion threshold. In terms of industry sectors, electrified transportation, renewable energy, and the grid were the main drivers of growth in energy transition investments last year, with all three sectors achieving record investment levels. The Asia-Pacific region was the standout performer in 2024, with energy transition investments growing by 21.3% year-on-year, exceeding $1 trillion for the first time.
Moore highlighted that China played a significant leading role, with its investment scale being over twice that of any other economy. According to Bloomberg New Energy Finance data, China solidified its position as the largest country for energy transition investment, with a total investment of $818 billion last year, a 20% increase compared to 2023, surpassing the combined investments of the United States, the United Kingdom, and the European Union.
In contrast, the investments in the United States, EU, and UK performed poorly last year. The U.S. saw stagnant investment growth at approximately $338 billion, while EU nations and the UK experienced declines, with $381 billion and $65.3 billion respectively. Notably, climate tech companies raised a total of $50.7 billion through private and public markets, marking a 40% decrease from 2023 and continuing a three-year downward trend. The most active funding occurred in clean power and transportation sectors, totaling $31.8 billion.
Despite setting new records in energy transition investment last year, Bloomberg New Energy Finance noted that the growth rate lagged behind the annual averages of 24%-29% observed in the previous three years. The varying investment gaps across different regions and technology sectors highlight the urgent need for diversified financing channels, as relying solely on public funds will not suffice for a successful transition. The analysis indicated that to meet the 2050 net-zero emissions target, annual global energy transition investments need to reach $5.6 trillion between 2025 and 2030, while current investment levels only meet 37% of the needed target.
Regarding China’s energy transition progress, Bloomberg New Energy Finance shared its insights with the China Energy News, forecasting a shift from “quantity” to “quality” between 2025 and 2030. The focus will transition from capacity expansion to enhancing system efficiency, addressing challenges such as consumption, market mechanisms, and cross-regional coordination. Additionally, the policy emphasis will pivot towards “dual control of carbon emissions.” As electric vehicles become more widespread and high-carbon industries face stricter regulations, the pressure to reduce emissions will intensify.
It is worth noting that China and the United States are the two leaders in the energy transition bond market, with growth in issuance seen last year. Globally, the total issuance of energy transition bonds is expected to reach $1 trillion in 2024, a 3% increase from 2023. Corporate bonds make up the largest share, benefiting from a global interest rate decline, while project bonds have decreased and government energy transition bonds remained unchanged year-on-year.
In the long term, China’s energy transition will benefit from low-carbon trends and cost advantages, with renewable energy, particularly wind and solar, continuing to play a crucial role. According to Tom Sun, head of China research at Bloomberg New Energy Finance, China has achieved its 2030 target of installing 1,200 GW of wind and solar capacity six years ahead of schedule, leading to a rapid increase in renewable energy generation. The installation growth rate has exceeded expectations, especially with significant strides made between 2023 and 2024. Furthermore, the penetration rate of electric vehicles is rapidly increasing, expected to account for 50% of new car sales by 2024 and rise to 80% by 2030, nearing 100% by 2050.
Albert Cheung, Deputy CEO of Bloomberg New Energy Finance, stated, “The energy transition will enter a challenging phase, and increasing difficulty is inevitable as the ‘low-hanging fruit’ has nearly been harvested.” In the photovoltaic sector, future growth will shift towards emerging markets, with countries such as India, Pakistan, Turkey, Saudi Arabia, and Romania witnessing over 50% growth in solar installations last year. However, many emerging markets still lack the institutional environment required for scaled development.
In the hydrogen sector, China’s leading role is becoming evident. According to Gao Xitong, a hydrogen research expert at Bloomberg New Energy Finance, China’s hydrogen industry possesses significant cost advantages and global competitiveness, particularly in green hydrogen, green ammonia, and green methanol, which will drive growth in the global hydrogen economy. Despite a slowdown in global hydrogen investment last year, China’s hydrogen development remains relatively steady, with an estimated 20% of planned hydrogen capacity expected to enter the bidding or construction phase this year.
Currently, China’s costs for electrolytic hydrogen production and green ammonia are the lowest in the world. It is projected that by around 2050, green hydrogen could achieve parity with gray hydrogen, positioning China as one of the few markets with this potential.
In conclusion, while significant strides have been made in energy transition, much work remains to achieve net-zero emissions, particularly in industrial decarbonization, hydrogen, and CCS technologies. Genuine collaboration between the public and private sectors is essential to unlock the potential of these technologies.
