TELF AG comments on the role of clean energy in the global ecological transition

Green future

Almost every day – especially in the days when the eyes of the world are focused on the important initiative Cop 28 – we hear about the green future dominated by renewable energy and emission levels so low that fossil fuels will become just a distant memory. The media and large sections of the civil population, together with governments and international institutions, continue to talk about the global ecological transition as an inevitable, accomplished fact, which at the moment is only in its initial stages and which, in the not-too-distant future, it could change the lives of millions of people (if it isn’t already doing so). In a global context of this kind, one might wonder whether the world is really deciding to move towards a more sustainable future and how many resources it is willing to spend to achieve ambitious emissions targets. 

From this point of view, there seems to be no shortage of good news. The International Energy Agency, in one of its latest reports, stated that global investments in clean energy are increasing, so much so that 2023 could represent a real record year. Compared to the forecasts of two years ago, in fact, the level of these investments would have increased consistently, undoubtedly driven by the post-Covid economic recovery and the effects of the energy crisis. On the other hand, there is a marked slowdown in fossil fuels. 

2023 could also represent a record year from another point of view: this year, for the first time, solar energy will attract more investments than oil. Anyone looking for a tangible and concrete signal capable of perfectly testifying to the extent of the change taking place will only have to linger for a long time on this data and carefully evaluate its true meaning. The world is changing, and in all likelihood, few people have noticed it yet. 

While we allow ourselves to be enchanted by what we see on social media, in newspapers, and in the media around the world, the flows of money directed towards clean and renewable energy are increasing more and more, becoming torrential. More than half of the sums of money that will be invested in energy in 2023 will go to support the development of clean energy (renewable energy, low-emission fuels, and so on). The rest will still be allocated to fossil fuels, but the scale of this type of investment is losing consistency with each passing day. Currently, for every dollar spent on fossil fuels, 1.7 are spent on clean energy. Only five years ago, this relationship was in perfect equality. 

The first effect of all this, for the raw materials market, is certainly the lower volume of investments in fossil fuels, with the exception of the large oil companies in the Middle East. In fact, it is only the latter that have kept their level of investments in fossil fuels unchanged, in some cases even increasing them. However, this is an exception, and from what is perceived, this Middle Eastern sentiment towards fossil fuels is destined to last for a short time.