Innovation gaps persist in heavy industry and transport despite $60 bn project pipeline: IEA

The IEA's State of Energy Innovation report, released presents a global review of energy innovation trends based on a dataset of over 150 technology highlights and a survey covering nearly 300 practitioners across 34 countries.

New Delhi: Venture capital (VC) funding for clean energy technologies declined by more than 20 per cent in 2023 and 2024, reversing a sixfold increase recorded between 2015 and 2022, the International Energy Agency (IEA) said in its latest report.The IEA's State of Energy Innovation report, released presents a global review of energy innovation trends based on a dataset of over 150 technology highlights and a survey covering nearly 300 practitioners across 34 countries.The report noted that while public and corporate energy research and development (R&D) spending has grown at an average annual rate of 6 per cent, early estimates for 2024 suggest that this growth is slowing in several advanced economies.According to the IEA, public energy R&D investment in its member countries currently stands at just over 0.04 per cent of GDP—less than half the level observed in the early 1980s. In contrast, previous decades saw public R&D spending reach 0.1 per cent of GDP during global energy crises.The IEA highlighted sectoral gaps in R&D investment, pointing out that spending as a share of revenues in cement and steel remains 20 per cent to 70 per cent below that of automotive and renewables. The aviation and shipping sectors have reduced their R&D expenditure over the past decade.

China became the leading country in energy patenting in 2021, with more than 95 per cent of its energy-related patents focused on low-emissions technologies. Globally, patenting for clean technologies has grown 4.5 times faster than for fossil fuels since 2000.

The report said public and private financing earmarked for large-scale energy technology demonstration projects this decade has reached around USD 60 billion, but 95 per cent of that funding remains concentrated in North America, Europe and China.Only 17 per cent of this demonstration funding is allocated to sectors such as heavy industry and long-distance transport, which require urgent innovation to support global emissions goals, the report said.The IEA recommended increasing public energy R&D budgets, supporting technology developers through economic cycles, and enhancing international cooperation to commercialise emerging energy technologies.