Europe needs over USD 32trn of net-zero investment by 2050, says BNEF

Europe needs to invest more than USD 32 trillion (EUR 29trn) in energy and related technologies between now and 2050 to transition to a net-zero economy, according to a new report by BloombergNEF (BNEF).

In 2022, the region’s investment in low-carbon energy transition was USD 227 billion. To achieve the report’s Net Zero Scenario, Europe has to increase its annual investments in clean energy supply, electric vehicles (EVs), heat pumps and sustainable materials to more than three times this level throughout the remainder of the decade and more than four times in the 2030s.

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According to BNEF's New Energy Outlook: Europe report that was released today, more than two-thirds of the required investment is on the demand side, with EVs accounting for the biggest single portion -- USD 21 trillion over 2022-2050, and heat pumps for another USD 1.4 trillion.

By 2050, Europe should also spend around USD 3.8 trillion on developing an expanded and digitalised grid that supports the integration of more renewables, EVs and heat pumps.

A similar amount, more than USD 3.8 trillion, is invested in new clean power assets by 2050 under the Net Zero Scenario, a large part of which before 2030.

In that scenario, onshore and offshore wind capacity grows to 675 GW by 2030, up from 234 GW in 2022, while solar expands to 774 GW from 226 GW. Together the two technologies provide 83% of generation by 2050, according to the study. BNEF estimates that in the medium term, the cheapest back-up capacity mix will come from batteries, gas plants with carbon capture and storage (CCS) and new nuclear plants. In the longer term, the analyst firm sees a role for gas plants fuelled with green hydrogen.

The Net Zero Scenario also projects a quick ramp-up of CCS capacity in the power sector and industries and a later emergence of hydrogen in hard-to-electrify applications. By 2050, Europe is seen to invest more than USD 904 billion into hydrogen and CCS infrastructure.

(USD 1 = EUR 0.918)