Global markets rally toward the 2050 net zero target
Record Clean Energy Investment Meets Rising Policy Headwinds
Global clean energy investment hit a record $2.3 trillion in 2025, up 8% from the prior year, according to BloombergNEF. Energy storage installations surpassed 100 gigawatts globally for the first time. Battery equipment prices have fallen to $117 per kilowatt-hour — less than a third of their cost three years ago.
Yet the capital surge is running headlong into a fractured policy landscape that complicates the path to net-zero emissions by 2050.
The Investment Picture
China dominated, deploying roughly $800 billion — about 4.1% of GDP — across renewables, storage and electrified transport. Chinese manufacturers control the bulk of battery supply chains, and new foreign entity of concern (FEOC) rules in the United States now restrict components linked to Chinese ownership, creating supply bottlenecks in the world's second-largest market.
Corporate demand added fuel. Power purchase agreements for zero-carbon electricity reached 29.5 gigawatts in 2025, the highest on record, driven by technology companies securing clean power for data centres. Data centre electricity consumption could reach 2,200 terawatt-hours by 2030, according to S&P Global — comparable to India's total usage — creating demand that renewables and fossil fuels are both racing to fill.
Policy Fragmentation
The United States has moved sharply against federal clean energy support. The administration repealed the EPA's Endangerment Finding, withdrew from the Paris Agreement, rolled back vehicle emissions standards, and enacted legislation phasing out key tax credits established in 2022. U.S. wind and solar investment fell 18% in the first half of 2025 compared with the same period a year earlier, according to Deloitte.
State-level action has partially offset the retreat—more than 20 states introduced plug-in solar legislation this cycle. But a University of Maryland analysis projects full federal rollbacks could reduce U.S. GDP by $1.1 trillion and household income by $160 billion cumulatively over the next decade.
Outside the U.S., momentum is more consistent. The UK's Great British Energy Act 2025 established a state-backed company to accelerate clean energy deployment. At COP30, global utilities pledged nearly $150 billion in near-term transition investments, with ambitions exceeding $1 trillion. China is expanding its carbon market and planning absolute emissions caps.
The Commitment Gap
The numbers behind corporate net-zero pledges tell a more complicated story. Some 41% of the world's 2,000 largest companies now have value-chain net-zero targets, up from 27% in 2024, according to Accenture. But only 16% of the top 4,000 companies are on track to reach net zero by 2050. Three sectors — energy, natural resources and utilities — account for 75% of operational emissions, and most companies in those industries saw emissions increase last year.
Major oil producers including BP have written down low-carbon assets and redirected capital toward traditional upstream operations. The Bank of England has cautioned that net-zero policies could weigh on economic growth. Net-zero banking and insurance alliances have disbanded.
What Investors Should Watch
The divergence between record investment flows and policy fragmentation creates a market defined by selective opportunity and concentrated risk. Battery storage — where costs have collapsed and deployment is accelerating — sits in a structurally different position than early-stage wind projects exposed to permitting delays and subsidy withdrawal. Geographic exposure matters: portfolios tilted toward jurisdictions with stable policy frameworks face different risk profiles than those dependent on U.S. federal incentives.
The net-zero transition is not retreating. Nor is it advancing uniformly. For investors, the question is no longer whether capital will flow into clean energy but which segments and regions offer durable returns — and which are priced on assumptions that the policy environment no longer supports.