Bloomberg NEF energy transition trends 2022

Bloomberg NEF energy transition trends 2022

Feb 25, 2022 2 min read

Bloomberg New Energy Finance (BNEF) has released its annual Energy Transition Investment Trends Report, recapping the last year with predictions for 2022. The carbon capture and storage (CCS) sector raised $2 billion in EMEA and the Americas, missing a funding record despite a record number of announcements. According to BNEF, climate-tech companies raised $165 billion across public and private markets in 2021. The energy and transport sectors attracted the most capital, at $68.5 billion and $67.3 billion, while only $15 billion went to agtech and foodtech despite the UN’s warning global food systems are responsible for over one-third of greenhouse gas emissions, more than transport and second only to energy.

Carbon capture and storage (CCS) tapped $2.3 billion in 2021, attracting $0.7 billion less capital than 2020, according to Bloomberg NEF. BNEF says despite the record number of announcements total funding dipped as developers seek more returns with falling costs in existing carbon capture. This year it predicts investment in CCS depends on large scale projects winning final investment approval.  

Image credit: Bloomberg NEF

Climate technologies attracting the most investment include wind, solar, hydrogen and fuel cells, batteries and electric vehicles. Bloomberg NEF further identifies food and agriculture innovation as a “nascent sector” that raised $14.9 billion total, following a strong year for alternative proteins and vertical farming. Recently PitchBook's annual Foodtech Report found more than $39 billion of venture capital was invested into foodtech startups in 2021.

Sustainable built environment startups in the materials and construction space raised lower totals than previous years which BNEF attributes to “slower progress on decarbonization” yet new VC funds focused on materials could heat up the market in 2022.

Image credit: Bloomberg NEF

Notable deals and announcements:

  • The biggest agtech deals included several SPAC reverse mergers, such as bioengineering firm GinkGo Bioworks’ $2.4 billion SPAC and Impossible Foods’ $500 million round
  • The largest energy and transport deal was Rivian's $12 billion IPO, backed by investors that included Amazon and Ford
  • The most important carbon capture deals announced in 2021 included Santos’ $165 million Moomba project in Australia
  • The UK government committed $500 million to CCS
  • The startup CarbonCapture raised $35 million, BNEF says puts it on track to be a future industry leader in direct air capture
  • BNEF expects the CCS industry to return to growth and predicts investments are on track to set a new record in 2022

FYI/PitchBook's annual Foodtech Report found more than $39 billion of venture capital was invested into foodtech in 2021. More than half went to just two categories, 1) online grocers and 2) apps & marketplaces.

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