IEA’s Energy Technology Perspectives 2024: Navigating the Future of Clean Energy and Trade

The International Energy Agency (IEA) has released its latest report, Energy Technology Perspectives 2024, emphasizing the intricate relationship between energy, industry, and trade policies as governments strive to achieve clean energy transitions.

As global demand for clean energy technologies surges, the IEA notes that the market for six key sectors—solar photovoltaic (PV), wind, electric vehicles (EVs), batteries, electrolysers, and heat pumps—has expanded nearly fourfold since 2015, reaching over USD 700 billion in 2023.

Key Points:

1. Manufacturing Growth: The market for clean energy technologies (solar PV, wind, EVs, etc.) has surged. Projections indicate it could nearly triple to USD 2 trillion by 2035.
2. Trade Evolution: Currently, clean energy technology trade constitutes about 1% of global goods trade but is rapidly increasing. By 2035, it's expected to reach USD 575 billion, underscoring its growing importance in the global economy.
3. Investment Surge: In 2023, global investment in clean technology manufacturing rose by 50% to USD 235 billion, driven mainly by solar PV and battery sectors. The U.S. and EU are making significant strides to bolster domestic manufacturing capacities.
4. China's Dominance: China dominates global manufacturing for key clean technologies, accounting for about 70% of the market. However, India is poised to transition from a net importer to a net exporter of clean technologies by 2035 if the clean energy shift accelerates.
5. Emerging Markets: Countries in Southeast Asia, Latin America, and Africa have the potential to enhance their roles in clean technology supply chains, but investments in infrastructure and skills are necessary for them to capitalize on these opportunities.
6. Policy Implications: Effective industrial strategies and trade policies are critical for fostering a competitive clean energy economy. The report stresses the need for careful design of trade measures to support clean energy transitions.
7. Maritime Challenges: Increased dependency on specific maritime chokepoints for clean technology trade could pose risks to supply chain resilience, necessitating diversification strategies.

Find the report here.