Global Energy Transition Investment Hits Record High: "From Declarations to Implementation in Climate Crisis Response"

KITA Releases "Analysis of Climate Tech Investment Trends" Report
For Climate Tech, "Capital Procurement and Demonstration" Now Determine Success
Scaling-Up Bottleneck Persists for Korean Climate Tech
Investment Support Needed, Including Public-Private Blended Finance

There is an analysis that the global response to the climate crisis, which had previously remained at the level of declarations and warnings, has recently entered a full-fledged implementation phase, thereby changing the competitive landscape of the "climate tech" industry. Previously, research and development (R&D) of technology was the key competitive factor determining success or failure, but now the focus has shifted to capital procurement and demonstration.

Cover of the report "Analysis of Global Climate Tech Investment Trends and Strategies to Revitalize the Korean Investment Ecosystem" published by the Korea International Trade Association. Korea International Trade Association

The Korea International Trade Association's Institute for International Trade and Commerce emphasized this point in its report, "Analysis of Global Climate Tech Investment Trends and Strategies to Revitalize the Korean Investment Ecosystem," published on January 20.

Climate tech is a compound term combining "climate" and "technology," referring to industries that generate profits through innovative technologies contributing to greenhouse gas reduction and adaptation to climate change in order to address the climate crisis.

According to the report, global investment in energy transition facilities and infrastructure in 2024 is expected to reach approximately 2.08 trillion dollars, more than five times the roughly 380 billion dollars recorded in 2015. This is also the highest amount ever recorded. It is interpreted as a sign that countries' carbon neutrality pledges are no longer just declarations but have entered a full-fledged implementation stage, leading to the construction of facilities and expansion of infrastructure in actual industrial settings.

The report also pointed out that while the role of stable capital procurement for implementing actual projects is growing, Korea's climate tech investment is not providing sufficient growth capital to support the transition from technology development to facility construction and mass production. As a result, promising companies are facing a "scaling-up bottleneck," preventing them from entering the global market.

The lack of demonstration opportunities was also cited as a major challenge to be addressed. For climate tech, operational data accumulated from running actual facilities in the field is necessary to prove technological credibility. However, the current public bidding system prioritizes price factors, making it difficult for innovative technologies to enter the market.

As a solution, the report proposed the expansion of "public-private blended finance," in which the public sector proactively shares initial risks to attract private investment. This can serve as a key catalyst to lower the funding barriers for climate tech companies, which require significant upfront costs.

The report also recommended measures such as "technology verification and demonstration support" utilizing public research facilities, and "initial demand creation linked to public procurement," benchmarking the United States' CalSEED program. CalSEED is an early-stage support program operated by California that integrates funding, mentoring, demonstration, and deployment to help climate tech startups overcome the "valley of death." It is designed to connect the idea stage to reliability verification and pilot demonstration, enabling a single pathway from "development → verification → market entry."

Park Soyoung, Senior Researcher at the Korea International Trade Association, stated, "Korea's strengths as a hub of Asia's manufacturing value chain include its mass production base in high carbon-emitting industries such as batteries, steel, and automobiles, as well as its extensive export experience." She emphasized, "To leverage these manufacturing capabilities as a foundation for the commercialization of climate tech, it is urgent to systematically expand demonstration environments under public leadership and to establish an investment ecosystem supported by blended finance."