Projected to grow from $700 billion to $2 trillion in 2035. Developing nations hold potential as producers and critical mineral hubs.
According to the International Energy Agency (IEA), the market size of clean energy technologies is expected to almost triple from $700 billion today to $2 trillion in 2035. In its latest report titled Energy Technology Perspectives 2024, the agency sheds light on how the six most adopted and manufactured clean energy technologies—solar photovoltaics, wind turbines, electric vehicles, batteries, electrolyzers, and heat pumps—are shaping global trade and manufacturing. The IEA emphasized that a market size of $2 trillion in 2035 would be close to today’s global crude oil market size. Cleantech trade alone could reach $575 billion in a decade, surpassing the global natural gas trade.
Yet, the growth in clean energy technologies is not homogenous across the globe. Countries with clear-cut and widespread policies regarding clean energy, especially China, the European Union, the United States, and India, are leading in clean tech investments. Despite the Inflation Reduction Act in the U.S. and the EU’s Net-Zero Industry Act, China is set to dominate the market, however, with projected clean tech exports hitting $340 billion by 2035.
The IEA highlights that developing and emerging countries hold vast potential to shift the concentration of the global market. Despite currently generating less than five percent of cleantech production value, they could become hubs for the production of certain goods. Examples the agency references include Southeast Asia’s competitiveness in producing solar components, Latin America’s wind turbine capacity, and North Africa’s potential as an EV manufacturing hub. In addition, these regions hold vast resources of critical minerals needed for cleantech worldwide, the IEA says. Developing and emerging nations could move up the value chain from mining to processing and capitalize more on the raw materials’ value. One example where this is already happening is Indonesia, which banned the export of certain unrefined raw materials last year, hoping to develop the domestic downstream value chain further.
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