The global market for clean energy technologies, including solar panels, wind turbines, electric vehicles, and batteries, is expected to surge from 700 billion US dollars in 2023 to over 2 trillion US dollars by 2035, nearly matching the value of the global crude oil market, according to a new report by the International Energy Agency (IEA).
Experts said this rapid growth highlights substantial opportunities and challenges as countries look to capitalise on clean technology manufacturing and trade. Trade in these technologies is also projected to triple, reaching 575 billion US dollars by 2035, making it 50 per cent larger than the current global trade in natural gas.
The report details the growing interplay between energy, industrial, and trade policies as governments face complex decisions to secure supply chains and economic opportunities.
“The market for clean technologies is set to multiply in value, increasingly catching up with fossil fuels,” said IEA Executive Director Dr Fatih Birol. “Countries are rightly seeking to capitalise on this economic opportunity, but governments should also focus on fostering competition, innovation, and cost reductions to reach their climate goals.”
Investment in clean technology manufacturing is already accelerating, particularly in established markets like China, the European Union and the United States, with India also expanding its position.
Although the US Inflation Reduction Act, the EU’s Net-Zero Industry Act, and India’s Production Linked Incentive Scheme have spurred domestic growth, China is expected to retain its lead, with its clean technology exports projected to reach 340 billion US dollars by 2035, rivalling the combined oil export revenue of Saudi Arabia and the UAE.
The report also identifies opportunities for emerging economies. Southeast Asia, Latin America, and Africa currently account for less than 5 per cent of the global value from clean technology production, but the report suggests they could play a much larger role with strategic investments.
For example, Southeast Asia could become a low-cost hub for producing polysilicon and wafers for solar panels, while Brazil has the potential to scale wind turbine manufacturing for export across the Americas. North Africa could emerge as an electric vehicle manufacturing centre and sub-Saharan Africa could focus on producing low-emission iron using hydrogen.
Dr Birol said that the benefits of clean technology should extend to all economies: “Growth in the manufacturing and trade of clean energy technologies should be for the benefit of many economies, not just a few. With sound partnerships, increased investment, and efforts to reduce financing costs, emerging economies can achieve this potential.”
The report also addresses the security dimensions of the clean energy technology trade. Unlike fossil fuels, which require constant replenishment, clean technologies provide a durable energy infrastructure, increasing the resilience of supply chains. However, around half of all maritime trade in clean technologies passes through the Strait of Malacca – significantly more than the roughly 20 per cent of fossil fuel trade passing through the Strait of Hormuz – adding a new layer to energy security considerations.
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