Global spending on the clean-energy transition hit record highs as the world moves to rein in climate change, but it’s still not enough to get on track to net-zero emissions.

Total spending surged 17% last year to $1.8 trillion, according to a report Tuesday from BloombergNEF. These include investments to install renewable energy, buy electric vehicles, build hydrogen production systems and deploy other technologies. Add in the investments in building out clean-energy supply chains, as well as $900 billion in financing, and the total funding in 2023 reached about $2.8 trillion.

Globally, investors poured $310 billion into power grids, which will be a critical tool to deliver clean energy that will be generated from new wind and solar farms coming online. Daniel Brenner/Bloomberg

The record spending reflects the growing urgency of international efforts to combat climate change on the heels of the hottest year on record – and even more heat expected this year. However, the world needs to be investing more than twice as much in clean technology in order to reach net-zero emissions by mid-century, according to BNEF.

“The opportunity is large and spending is accelerating, but we need to do so much more,” Albert Cheung, BNEF’s deputy chief executive officer, said. Total spending on the energy transition last year was well short of the more than $4.8 trillion that the London-based research provider estimated will be needed annually from 2024 to 2030 to get the world on a net-zero pathway.

BNEF is warning that governments need to do even more in the coming years. Cheung estimates that investments needs to surge by 170% for the world to get on pace to reach net zero.

“We’re in the steep part of the curve, and we’ll see rapid growth” for spending every year, he said. “But whether we get on track for net zero, that’s a difficult ask.”

China remains the biggest market by far with $676 billion spent last year. That’s an increase of only 6% compared to 2022, though. Investments in the U.S., the U.K. and Europe grew by at least 22%, in comparison, to a combined total of $718 billion. That was driven in part by incentives in the Inflation Reduction Act, the flagship US climate law, which is starting to have a significant impact. Strong sales of electric vehicles in the U.K. as well as booming demand for renewables across Europe also helped drive up the total.

Spending on EVs globally climbed 36% to $634 billion. That made it the sector that saw the largest investments, surpassing renewable energy, which gained 8% to $623 billion. Investors poured $310 billion into power grids, which will be a critical tool to deliver clean energy that will be generated from new wind and solar farms coming online, making it the third-biggest market.

Some nascent technologies saw torrid growth. Hydrogen investments, for example, tripled to $10.4 billion in a sign of increasing interest in the technology, though it has yet to be proven at scale.