China remains the frontrunner in clean industry development, securing a quarter of the $250 billion of investment in clean plants to date, closely followed by the U.S. at 22 percent and the EU at 14 percent.
However, a bloc of emerging markets, including India, Egypt and Brazil, part of the “new industrial sunbelt”, is quickly catching up to countries with historic industrial bases, according to new data from the Global Project Tracker and report published by Mission Possible Partnership (MPP).
“A new Industrial Revolution is on the rise. Perhaps surprisingly, developing economies have an enormous opportunity to leapfrog fossil fuels in heavy industry and transport, creating the infrastructure for sustainable economic growth in the 21st century. We now need to unlock the full potential of the clean industrial revolution and exponentially accelerate the existing pipeline,” said Christiana Figueres, co-founder of Global Optimism.
Industrial sunbelt secures fifth of investment in clean industrial plants
The big three industrial leaders may soon be overtaken by a host of newly industrializing countries capitalizing on favorable conditions for renewable energy production and building momentum in sectors at the forefront of a new clean industrial revolution. This shift points to a potential industrial realignment, as the production of materials, chemicals and fuels moves across geographies and new trade corridors emerge.
At the heart of this shift is the industrial sunbelt, a region spanning Africa, Asia and South America where abundant natural resources are being harnessed to provide solar energy and supportive policy environments and cost advantages combine to create ideal conditions for new industrial processes.
Industrial sunbelt countries, such as Indonesia and Morocco, have secured a fifth of investment in clean industrial plants to date. However, a $948 billion investment opportunity exists for their announced projects, particularly as economies dominated by agriculture increasingly see lower-cost clean ammonia for fertilizer as both an economic opportunity and a chance to build increased food security.
Investment Secured (FID + Operating) ($bn USD) | Investment Potential (Announced) ($bn USD) | Total investment ($bn USD) | % Investment Secured (FID + Operating) | % Investment Potential (Announced) | % Total Investment | |
Total across all countries | 245 | 1612 | 1857 | 100% | 100% | 100% |
EU + China +US | 149 | 547 | 696 | 61% | 34% | 37% |
EU | 34 | 157 | 191 | 14% | 10% | 10% |
China | 61 | 102 | 163 | 25% | 6% | 9% |
US | 54 | 288 | 342 | 22% | 18% | 18% |
Sunbelt | 50 | 948 | 997 | 20% | 59% | 54% |
EMDEs | 57 | 788 | 845 | 23% | 49% | 46% |
Sunbelt EMDEs | 41 | 775 | 816 | 17% | 48% | 44% |
Global $1.6 trillion pipeline of projects is not yet financed
The new report, “Clean Industry: Transformational Trends”, by MPP and supported by the Industrial Transition Accelerator (ITA) shows a global $1.6 trillion pipeline of projects announced but not yet financed. Industrial sunbelt countries account for 59 percent of this investment pipeline, compared to 18 percent for the U.S., 10 percent for the EU, and just 6 percent for China. Projects span key sectors, including aluminium, chemicals, cement, aviation and steel.
In total, a record 826 commercial-scale clean industrial plants across 69 countries are logged in the MPP Global Project Tracker. The growth in this third edition of the Global Project Tracker underscores that companies around the world are continuing to capitalise on clean industrial projects and tap into nascent markets despite ongoing geopolitical and economic uncertainty.
“The new generation of energy-intensive industrial plants will go to where they can access abundant, reliable, cheap, clean electricity to produce materials, chemicals and fuels. The industrial heartlands of the past will have to be smart and cooperate if they want to retain their leading positions,” said Faustine Delasalle, CEO of MPP and executive director of the ITA.
Green ammonia creates opportunity to access new export markets
The fastest-growing clean industry sectors are green ammonia and sustainable aviation fuels. Both present a strong business case: with clean ammonia being a drop-in solution for the fertiliser sector – a pre-existing market at scale, and sustainable aviation fuels benefitting from support by strong regulatory and policy frameworks as well as a continuing demand for air travel.
The analysis shows the new industrial sunbelt countries host over three-quarters of all commercial-scale green ammonia production facilities planned globally. Total pipeline global green ammonia production capacity from first-mover sunbelt countries could play a significant role in supply chains around the world. This transition represents an opportunity to leapfrog carbon-intensive development, access new export markets and gain a competitive advantage in attracting value-creating industries.
However, challenges remain; the pace of new commercial-scale clean project announcements remains strong, but the report highlights a persistent bottleneck. The conversion from announced projects to final investment decisions is too slow. If the rate of conversion seen in the last six months were to continue, it would take approximately 40 years for all announced projects to begin construction.
Therefore, unlocking the full pipeline will require a fivefold increase in investment, along with concerted action from governments, financial institutions and corporate buyers. Governments, in particular, can secure industrial leadership by accelerating project financing through policy measures tailored to their unique resource and economic profile.
