Weekly Buzz: 🌊 The trillion-dollar cleantech wave

14 July 2023

🍃 A green gold rush

There’s a trillion-dollar wave of new technologies sweeping across the world, and it’s centred on sustainability. Over in the US, we’re seeing a comprehensive push towards cleantech (we’ll break the term down in our Jargon Buster). This renewable boom is expected to unlock an estimated $3 trillion in infrastructure investment in the coming decade. And China isn’t showing any signs of powering down either; the country is estimated to invest over $7 trillion into its energy transformation through to 2040.

A renewable revolution

We’ve seen energy revolutions before, but not like this one; the US could double the amount of its energy produced by the shale revolution 15 years ago. And the thing is, renewable sources like solar and wind are fickle friends –  power storage solutions are key to ensuring that energy is available around the clock. That’s why China is forecast to need 70 times its storage capacity. Let’s take a look at some other key areas:

What’s riding on this cleantech wave?

  • Hydrogen: It’s like the Swiss army knife of renewable energy – hydrogen stores energy, powers clean cars, and helps industries cut down on emissions. No wonder it’s seen as such a game-changer for a sustainable and low-carbon future.
  • Electric vehicles (EVs): EV adoption is only in its infancy stage now, but the switch from conventional cars is crucial for global carbon emissions targets. For this to happen, charging and refuelling infrastructure will be essential.
  • Carbon capture: This field focuses on reducing greenhouse gas emissions. This means capturing emissions at the source or even removing them from the atmosphere – and then using them in various ways.
  • Biofuels and renewable gas: These provide an alternative to fossil fuels, aiding in the transition to cleaner energy. Think of fuels made with corn, soybean, or palm oil.
  • Clean energy: This source of power comes from renewable sources like solar, wind, and nuclear energy. This shift alone presents many opportunities: the construction of renewable energy plants and the modernisation of distribution grids, for example.

How does this affect me as an investor?

We’re seeing a global move towards cleantech. If you’re investing in it, you may need to look at your investment time horizons. Some opportunities like hydrogen will take years to develop because of the infrastructure needed, whereas a shift to EVs could come much quicker. Within StashAway, our Environment and Cleantech thematic portfolio is diversified across a variety of cleantech sectors, including clean energy and energy storage. This allows you to stay invested for the long term without excessive risk. Or you could use our Flexible Portfolio, with the Green asset class, to tailor your exposure towards specific areas of cleantech.

This article was written in collaboration with Finimize.

🎓 Jargon buster: Cleantech

Cleantech, short for clean technology, refers to a rapidly evolving field of products, services, and processes aimed to reduce our impact on the environment – or even reverse it. Cleantech includes various industries, from farming and water treatment, to power and transportation. The category is broad, but a common goal is to create a more sustainable future.

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