Global Energy Transition Slows Amid Volatility, Says WEF

Key Takeaways:

1. Transition Momentum Slows

The WEF's Energy Transition Index demonstrates a slowdown over the past year, marking the weakest acceleration since 2022. Of 120 countries assessed, 83% scored lower in at least one of three categories—security, equity, or sustainability—illustrating widespread backsliding.

2. Europe Leads the Pack

Sweden, Denmark, Finland, Switzerland, and France top the WEF rankings, benefiting from strong political commitment, R&D investment, renewable adoption, energy efficiency, and carbon pricing.

3. Africa's Strong Showing

Despite global headwinds, sub-Saharan Africa posted a 10% improvement over the past decade—the fastest growth among global regions—driven by better regulation, energy access, and affordability.

4. Investment Hits $2.1 Trillion

BloombergNEF reports record investment in the energy transition, rising 11% to $2.1 trillion in 2024. However, this is only about 37% of the $5.6 trillion annual investment needed through 2030 to stay on track for net-zero goals.

5. Advanced Economies and China Dominate

Advanced nations and China attract nearly 90% of clean energy investments. Developed economies led, but developing markets—especially Africa and Latin America—are beginning to close the gap.

Where Progress is Needed

• Expand financing to emerging economies through targeted de-risking and development finance.

• Diversify investment by accelerating industrial decarbonization, hydrogen production, and carbon capture initiatives.

• Boost equity by ensuring access and affordability, especially in lower-income countries.

• Enhance collaboration to address technological, regulatory, and geopolitical hurdles.

Bottom Line

The world has made significant strides toward clean energy, but without renewed investment and global cooperation, momentum may falter. The WEF warns that without decisive action, the energy transition could stall, threatening climate targets and equity.

Photo: stock photo

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