Venture capital funding for decarbonisation projects falls by 90% in 2023: report

Funding for projects peaked in 2022, GlobalData noted.

Venture capital funding for decarbonisation projects dropped by roughly 90% in 2023 after peaking in 2022, GlobalData reported. 

In its Net Zero by 2050 report, GlobalData noted that decarbonisation-related deals value fell to $45b in 2023 from a high of $433b in 2022. 

The report linked this to “economic woes, high energy prices, lacking policy support and nascent technologies.”

Across renewable energy projects, the highest investment is allocated in wind, solar, and hydroelectric projects that require large amounts of capital. 

Moreover, VC funding remains concentrated in traditional markets, such as the US which accounted for 51.36% of the total investment between 2019 and 2023. China placed second at 14.3%. 

“In many ways this is unsurprising. VCs tend to focus on industries with extreme growth potential given that they are entering into businesses at such an early stage,” the report read in part.

“While renewable power has been shown to be a reliable investment with much higher returns than fossil fuels, the market is more mature than that of EVs. This focus may shift in future, however, with EV sales growth having stalled.”