Is your investment strategy aligned with the global shift towards clean energy?
We are witnessing a pivotal moment for the fossil fuel industry, historically a cornerstone of global energy. However, the viability of this sector as a sound investment is rapidly diminishing for several compelling reasons.
The Rise of Renewables & Investment Decline in Fossil Fuels:
Renewable energy investments have overtaken fossil fuels as there is less demand for fossil fuels and more demand for renewables. In 2015, global energy investments in fossil fuels and clean energy were almost equal, however over the last 8 years there has been a significant rise in the investment in clean energy compared to fossil fuels. According to the International Energy Agency (IEA), in 2015 around $1 trillion dollars was invested in clean energy and by 2023 that number has risen to around $1.7 trillion, while fossil fuel investments fell from $1.2 trillion in 2015 to $1 trillion in 2023.
Demand and Revenue Decline:
Projections indicate a sharp decline in fossil fuel demand and revenue. Under a Net Zero scenario, oil industry revenue could drop from $3 trillion in 2022 to as low as $0.2 trillion by 2050. This forecast underscores the urgent need for the fossil fuel industry to adapt and innovate.
Industry Shifts such as:
– Road Transport: Moving towards electric power, potentially reducing oil usage to 7% by 2050 under a Net Zero scenaro.
– Aviation and Shipping: Transitioning to biofuels and efficiency, with a potential 9% drop in oil use.
– Industry: Facing short-term increases but long-term niche specialization.
– Buildings and Power: Embracing renewables and efficiency, significantly reducing oil dependence.
The tides of change are mounting, and the fossil fuel industry must navigate these waves of innovation and sustainability. The significant reduction in fossil fuel investments reflects the shift in economic backing towards more sustainable alternatives as well as the fact that over the last ten years fossil fuel investing has not been the best place to be. The future belongs to those who can adapt and thrive in this evolving landscape.
Stay ahead of the curve and embrace the future of energy!
Learn more about our fossil-free investment options by reaching out to us:
bdavis@stancecap.com
kyle@stancecap.com
