Global clean fuel needs to quadruple investment by 2030: WEF

Global clean fuel investment will need to quadruple from nearly $25 billion at present to over $100 billion annually by 2030 to meet clean energy targets, a new  study said on Thursday. Clean fuels can strengthen energy security and economic development goals, stimulating two to three times more jobs than conventional fuel sectors while diversifying national energy supplies, the World Economic Forum report said.

The white paper, prepared in collaboration  with Bain and Company, highlighted the potential of the clean fuel sector to stimulate job growth and diversify energy supply, and set out policy, business and financing measures that can turn global goals into credible, economically viable projects.

Clean fuels — mainly liquid or gaseous fuels, ranging from biofuels to hydrogen derivatives  and lower-carbon fossil  fuels — are emerging as a key component of the energy transition, offering countries a way to strengthen energy security, support industrial and rural jobs and cut emissions in transport and industry.

With liquid and gaseous fuels providing 56 per cent of global energy today, the report titled ‘Fuelling the Future: How Business, Finance and Policy can Accelerate the Clean Fuels Market’, underlined how clean fuel investment can build on and strengthen existing systems and infrastructure, and unlock sustainable economic growth.

While clean fuels currently make up just over 1 per cent of global clean energy investment, ambition is growing, reflected in initiatives such as the ‘Belem 4x’ pledge to quadruple production and use by 2035, put forward  by Italy, Japan, India and Brazil ahead of COP30 and now endorsed by more than 25 countries.

The report said that achieving this ambition will require coordinated action across policy, finance and industry to bring forward a larger pipeline of viable projects that deliver returns to investors and long-term value to national economies.

“The case for clean fuels is strong, but a reality check is needed to turn ambitions into investable projects. At least USD 100 billion in annual investments are needed by 2030 to deliver on global clean fuel ambitions,” it said. Current investments are nearly USD 25 billion per year, or just above 1 per cent of total investment for clean energy.  At this rate, with only 10 per cent of announced new capacity for 2030 past investment decisions, the market will fall short of its targets, the WEF said.

Despite growing interest, many clean fuel projects still struggle to advance due to high upfront costs, uncertain demand, fragmented value chains and uneven regional policy environments.

Addressing these barriers will require predictable, performance-based policies, well-designed public-private risk-sharing mechanisms and closer collaboration across value chains to better align supply and demand, according to the report.

These approaches will be essential to help more projects reach the investment stage and to build a stable pipeline of commercially viable, regionally tailored opportunities, it added. The report, released ahead of the WEF Annual Meeting in Davos next week, draws on detailed technical and economic modelling, expert consultations and contributions from more than 30 organisations participating in the WEF’s Future of Clean Fuels initiative. A broad definition of clean fuels is considered, encompassing liquid biofuels, biogases, lower-carbon fossil fuels, synthetic fuels and other hydrogen derivatives.