An IEA analysis reveals a complex interplay between energy, industrial, and trade policies as countries aim to secure supply chains and economic opportunities. The latest instalment of the IEA’s technology publication, Energy Technology Perspectives 2024 (ETP-2024), focuses on the outlook for the top six mass-manufactured clean energy technologies: solar PV, wind turbines, electric cars, batteries, electrolysers, and heat pumps.
Based on current policy settings, the global market for these technologies is set to rise from $700 billion in 2023 to more than US$2 trillion by 2035. Trade in clean technologies is also expected to increase sharply, tripling within a decade to reach US$575 billion, which is more than 50% larger than the current global trade in natural gas.
This increase in the global clean technology market is accompanied by a record wave of investment in the manufacturing of clean technologies, as countries seek to bolster their energy security, maintain their economic edge, and reduce emissions. Most of this investment is concentrated in regions with an established foothold in the sector, including China, the European Union, the United States, and increasingly India. Despite the strong impact of the Inflation Reduction Act and Bipartisan Infrastructure Law in the United States, the EU’s Net-Zero Industry Act, and India’s Production Linked Incentive Scheme, China is set to remain the world’s manufacturing powerhouse. Under current policy settings, China's clean technology exports are projected to exceed $340 billion by 2035, roughly equivalent to the combined oil export revenue this year of Saudi Arabia and the United Arab Emirates.
Currently, countries in Southeast Asia, Latin America, and Africa account for less than 5% of the value generated from producing clean technologies. However, ETP-2024 emphasises that the new clean energy economy remains open to countries at various stages of development. The report identifies key opportunities for emerging and developing economies, based on a country-by-country assessment of over 60 indicators such as the business environment, infrastructure for energy and transport, resource availability, and domestic market size.
The report suggests that beyond the mining and processing of critical minerals, emerging and developing economies could leverage their competitive advantages to move up the value chain. For instance, Southeast Asia could become one of the cheapest regions to produce polysilicon and wafers for solar panels within the next decade, while Latin America, particularly Brazil, has the potential to scale up wind turbine manufacturing for export to other markets in the Americas. North Africa has the potential to become an electric vehicle manufacturing hub within the next decade, and various countries in sub-Saharan Africa could produce iron with low-emissions hydrogen.
