According to a report from the International Energy Agency (IEA), over $500 billion (£391.13 billion) was invested in oil and gas last year, undermining environmental activists’ calls for a halt to new fossil fuel development.
Oil and gas production investment increased by 9% last year, reaching $530 billion, and is expected to rise another 7% this year to around $570 billion.
The IEA noted that this surge was driven by producers in the Middle East and Asia.
Similarly, the World Energy Investment 2024 report indicated that investments in coal production rose by 6% last year, primarily due to demand in China, India, and Southeast Asia.
The figures were released just a day after UN Secretary-General António Guterres labelled coal, oil, and gas corporations as the “godfathers of climate chaos” and called for a ban on fossil fuel advertising. The IEA report highlighted that fossil fuel industries emit nearly 120 million tonnes of methane annually as a by-product, despite the fact that reducing these emissions would be one of the easiest and most cost-effective climate measures.
Last year was the hottest on record, and the World Meteorological Organization (WMO) warned on Wednesday that the record could be broken again as soon as this year.
The fossil fuel industry is the leading source of planet-warming greenhouse gases, with humanity releasing the equivalent of 55 billion tonnes of CO2 into the atmosphere each year.
Despite this, the IEA report noted positive trends in renewable investment, with a record $2 trillion set to be allocated to clean technologies this year. This includes renewables, electric vehicles, nuclear power, grids, storage, low-emission fuels, efficiency improvements, and heat pumps.
Global energy investment is expected to exceed $3 trillion for the first time this year, meaning that roughly twice as much is being invested in clean energy projects compared to fossil fuels.
For the first time in 2023, combined investment in renewable power and grids surpassed the amount spent on fossil fuels.
IEA executive director Fatih Birol stated, “For every dollar going to fossil fuels today, almost two dollars are invested in clean energy. The rise in clean energy spending is underpinned by strong economics, continued cost reductions, and considerations of energy security.”
China is projected to account for the largest share of clean energy investment in 2024, with an estimated spend of $675 billion, while Europe is expected to invest $370 billion and the United States $315 billion
More spending is being directed towards solar photovoltaic (PV) technology than any other electricity generation method, with investment expected to reach $500 billion in 2024 as solar module prices continue to decrease.
However, the IEA noted that there are still investment shortfalls in energy infrastructure in parts of the world, particularly in emerging and developing economies outside of China.
