Clean energy investors won’t be impressed by G-20 nations’ inaction

investmentnews.com:

The European Union and UK have been world leaders for implementing policy to promote clean energy technologies, but their crown is starting to slip.

The EU and UK have taken the top spots in BloombergNEF’s ranking of the Group of 20’s low-carbon policy regimes since the first edition in 2021, and this year was no exception. But what was unusual was that neither of them improved their score, averaging a decline of 1.1 percentage points compared with the 2023 ranking. Even the US fell back this year, in spite of the momentum it had created with its landmark Inflation Reduction Act. 

The weakening climate ambitions of the world’s biggest economies is increasing uncertainty among consumers, industry and investors — a subject that will likely set the tone for many discussions at BNEF’s summit in New York this week.

There are a number of reasons top ranked G-20 members lost points on BNEF’s ranking. In some cases, governments scrapped low-carbon programs with little warning. For example, in December 2023, Germany announced unexpectedly that it would accept no further applications to the electric vehicle purchase subsidy program, which had been due to end in 2024. As a result EV sales dipped 16% in 2023 compared with a 14% increase across the EU as a whole.

The last year has also seen European policymakers weaken or backtrack on low-carbon regulations. EU lawmakers reached a provisional deal at the end of 2023 to allow an exemption to the rules on mechanisms to ensure sufficient electricity generation capacity. This would effectively mean that national governments can continue to subsidize coal-fired power plants until at least 2028. The bloc and its member states also lost points for weakening measures to promote low-carbon