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    Investment in energy transition accelerating, but regulatory risks remain top barrier to growth

    1400 investors surveyed for the KPMG Energy transition investment outlook report
    • Seventy-five percent of investors are still engaging in fossil fuel projects, recognizing the role fossil fuels play in ensuring energy security as the transition continues
    • East Asia most attractive region for future energy transition investment
    • Energy efficiency and renewables most attractive investments in the next two years 

    As COP29 gets underway in Azerbaijan, the appetite for investment in energy transition assets is increasing rapidly, according to new research from KPMG International.

    1400 senior executives from around the world were surveyed for the KPMG Energy transition investment outlook report, with 72 percent saying they believe investment in the space is growing significantly and will continue to do so in the coming years.

    The findings show confidence levels in the energy transition deals and pursuit of investments in clean energy technologies and projects are high, despite a prolonged period of geopolitical volatility and high interest rates.  When asked what specifically they plan to invest in, energy efficiency, including electrification, was identified by executives as the most attractive investment in the next two years (36 percent), followed by renewable and low carbon energy (34 percent). 

    The data reflects the IEA’s World Energy Investment 2024 findings that reveal some US$2 trillion of the US$3 trillion in global energy investment anticipated this year will be in clean energy tech and infrastructure – close to twice the investment in fossil fuels.

    KPMG also asked respondents to highlight one or two regions that would be most attractive for their organization’s energy transition investment over the next two years. Forty-three percent selected East Asia, followed by North America at 39 percent and Europe at 35 percent.

    While the KPMG research highlights growing confidence in energy transition, there are concerns continued investment could slow down due to policy or regulatory risks. Forty percent of execs surveyed identified these as the top barrier to investment, with market volatility a close second on 36 percent. 

    Policy and regulatory actions are undoubtedly shaping the energy transition—both as powerful drivers and as obstacles. It's clear that without a supportive regulatory framework, we risk holding back progress in this critical transformation. The path forward demands more than ambition; it needs stable, transparent, and consistent policies, like subsidies for renewables, carbon pricing, and mandates for clean energy. These frameworks don’t just support change; they accelerate it, opening doors to sustained investment and rapid growth in clean energy and infrastructure.

    Mike Hayes

    Decarbonization and Nature Leader & Global Head of Renewable Energy

    KPMG International

    mike hayes

    While there are concerns over regulatory risk, the findings demonstrate a collective view that investment will grow through increased partnerships. The overwhelming majority of respondents (94 percent) say they plan to prioritize finding partners and taking collaborative approaches to share risks, resources and expertise.

    Investors are also mitigating risk through diversity in investment, with fossil fuels continuing to play a key role in an orderly transition. Only a quarter (25 percent) of executives surveyed said they are not making new investment in fossil fuel. The survey findings reflect the data from the Energy Institute’s Statistical Review of World Energy, in collaboration with KPMG, which found global fossil fuel consumption actually reached a record high in 2023, driven primarily by coal and oil. Despite the rapid growth in renewables, all credible forecasts see fossil fuels playing a steadily declining yet vitally important in the energy mix over the next two decades. Recent years have shown how fossil fuels – especially natural gas – remain crucial to energy security, with further investment needed to meet energy demand as the transition proceeds.

    Reflecting the drive to invest in a broad and diverse set of opportunities, 64 percent have invested in energy efficiency technologies (including electrification) over the past two years. Fifty-six percent have invested in renewable and low-carbon energy, 54 percent in energy storage and grid infrastructure and 51 percent in transportation and related infrastructure. This range highlights the breadth of opportunities for investors, as each area of interest involves many different systems and technologies. While individual projects in renewables, storage or grids often hit the headlines with high dollar-value or gigawatt capacity, energy efficiency investments are often less visible and encompass many smaller investments and optimizations. However, it is estimated that doubling the global rate of progress on energy efficiency could reduce energy costs by one third and deliver 50 percent of worldwide CO2 reductions by 2030. 

    What we’re seeing is an enhanced understanding of the scale of the energy transition and the need to invest in the capital-intensive infrastructure that can help us decarbonize and transition energy sources. We need a phased transition that delivers the change needed while maintaining returns for businesses and investors.

    Elizabeth Ming

    Lead of Global Sustainability for Private Equity

    KPMG International

    Elizabeth Ming
    Mike Hayes
    Mike Hayes

    Climate Change and Decarbonization Leader, Global Head of Renewable Energy

    KPMG in Ireland

    elizabeth-ming
    Elizabeth Ming

    Partner, Sustainability Audit, Private Equity, KPMG LLP

    KPMG in the U.S.

    For media queries, please contact:

    Brian O’Neill
    Global Media Relations

    T: +44 7823 668 689
    E: Brian.ONeill@kpmg.co.uk

    About the research

    The KPMG Energy transition investment outlook is supported by primary and secondary research.

    The primary sources comprise a survey of 1,400 senior executives from around the world, together with in-depth interviews with subject matter experts and leaders. Secondary sources are referenced via footnotes throughout the report.

    The survey was fielded in July and August of 2024. 

    About KPMG International

    KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organization or to one or more member firms collectively.

    KPMG firms operate in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities.

    KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.  For more detail about our structure, please visit kpmg.com/governance.