Investment in renewable energy sources is on course to reach $1.7tn (£1.37tn) this year, with more money being spent on funding solar energy sources than oil and gas for the first time, according to the latest report by the International Energy Agency (IEA).
The agency's findings showed that investment in clean technologies – including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps – is expected to increase by 24 per cent since 2021.
In contrast, investment in fossil fuels had risen 15 per cent in the same period.
"Clean energy is moving fast – faster than many people realise. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels," said IEA executive director Fatih Birol. "For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time."
In 2023, the IEA expects investment in solar power to hit $380bn (£307bn), with investment in oil exploration and extraction reaching $370bn (299bn).
"This crowns solar as a true energy superpower. It is emerging as the biggest tool we have for rapid decarbonisation of the entire economy," said energy think tank Ember's head of data insights, Dave Jones.
Although the increased funding pledges made to renewable energy sources are a cause for celebration, the IEA warned about the fact that investment in carbon-emitting energy sources was still rising in certain parts of the world, which could lead to a global divide and undermine the clean transition.
In order to reach the targets set by the Paris Agreement as well as reach net zero by 2050, as many nations have pledged, fossil-fuel investment would need to significantly decrease, the agency found. At current levels, demand for oil and gas is expected to be more than double the amount the sector requires to reach climate targets in 2030. For coal, it could hit six times the amount.
The IEA also found that major energy companies, for the most part, are not putting considerable funds into the transition to green energy.
These findings correlate with the latest data collected by Rystad Energy and analysed by Global Witness which found that five of the top 10 UK oil and gas companies are set to increase their scope three emissions by the end of the decade.
The five companies whose emissions are expected to rise are Shell, BP, Equinor, Chevron and the Israeli conglomerate Delek Group, while the other five's are said to decrease.
Together, the top 10 oil and gas companies are expected to emit 725 million tonnes of CO2 between now and 2030. Shell and BP alone are expected to be responsible for 36 per cent of these emissions.
"Big oil saying that scope three doesn't count is like arms dealers saying they don't pull the trigger," said Alexander Kirk, fossil fuels campaigner at Global Witness. "Oil and gas is produced to be burnt, just like weapons are made for warfare. If we continue burning fossil fuels at current rates, then humanity is driving itself off a cliff-edge."
A spokesperson from Shell said: "By the end of last year we reduced emissions from our operations by 30 per cent compared with 2016 on a net basis. That's more than halfway towards our 2030 target of reducing them by 50 per cent.
"Over that same period, the net carbon-intensity of the energy products we sell fell by nearly 4 per cent while the net carbon-intensity of the global energy system fell by around 2 per cent – according to our analysis of International Energy Agency data."
Offshore Energies UK (OEUK), the industry representative for North Sea energy companies, said oil and gas is "essential" to the UK and will be needed "for many years", and that despite the rise in emissions for some companies overall UK Continental Shelf production is in decline.
"For oil and gas companies, these scope three emissions arise predominantly from the use of our products in everyday lives," said Mark Wilson, OEUK's health, safety, environment and operations director. "Oil and gas is essential to the UK: it powers homes, industries and transportation."
A spokesperson from the Department for Energy Security and Net Zero added: "There will continue to be ongoing demand for oil and gas over the coming years as we transition to lower carbon, more secure forms of energy generated in this country.
"Sourcing oil and gas domestically in the North Sea has a far lower carbon footprint than shipping it from abroad, and our oil and gas sector is well positioned to invest in clean technologies while protecting British jobs and expertise."
The reports have been made public shortly after Shell revealed the company obtained nearly $1.7bn (£1.4bn) more in profit in 2022 than experts had predicted. Other companies in the sector have also obtained record-breaking profits in 2023, with BP making around £500m more than originally predicted.
Energy companies' rise in earnings during a cost-of-living crisis and worsening global warming has led many Britons to call for windfall taxes, as well as express their support for the idea of oil and gas companies becoming financially responsible for the economic consequences of climate change.
Earlier this week, Just Stop Oil protesters clashed with drivers as they staged marches on three bridges in central London to protest continued investment in fossil fuels.
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