As the world searches for solutions to address the climate changewhich involves more environmentally responsible practices. environmentin Europa the renewable energies have gained relevance and this is manifested by an increase in the foreign direct investment in this sector.
According to data from FDI MarketsEurope closed 2021 with foreign direct investment in renewable energies amounting to 76.579 billion dollars,
At present, the countries that are leading the way in research and the installation of clean energies have become a magnet for FDI in various sectors of the economy, notes the website Digital Leaders.
Solar and wind power plants are proliferating around the world and decommissioned coal and gas power facilities, in many cases, are repurposed to accommodate energy storage batteries, which are a must-have to maximize the benefits of clean energy.
Technological progress in recent years has accelerated the introduction of new energy sources, such as green hydrogen.
The pandemic's inevitable hit to FDI has affected all member states, but the Old Continent has shown resilience as an investment destination. And although the global FDI pie shrank by 26.7% in 2021, according to data from FDI Markets, the share grabbed by Europe grew, mainly at the expense of the Asia-Pacific region.
Thus, Europe was the destination of choice for almost half (46.6%) of the FDI projects announced in 2020 and 2021, followed at a distance by Asia-Pacific (19.86%) and North America (15.5%). In this context, Europe is very well positioned to continue to lead FDI.
The EU is struggling to strike a balance between energy sustainability and security of supply, especially in the wake of Russia's invasion of Ukraine, which has led to an unprecedented increase in bills for the citizens of the Old Continent. This ambiguity was exposed when it decided to include natural gas and nuclear energy in the "green classification" that determines which economic activities are considered sustainable.
Also, most companies already see Europe as a "green leader". At the same time, however, the strict environmental legislation poses a major risk to the attractiveness of the Old Continent.
Despite these risks, the renewable energy sector was the largest recipient of FDI in 2021.
The rise of electric mobility is the main force driving the growth of sustainable electricity generation across the continent, even though many countries that have been historic centers of the global automotive industry were slow to implement electric mobility strategies.
The pandemic provided an impetus to implement more ambitious policies to promote the electric vehicle industry.
As a result, FDI adjusted to this new reality. Europe was the largest recipient of investment in battery production for electric vehicles in 2020 and 2021, with multi-billion dollar projects announced across the continent, with these being most palpable in countries such as the UK, Germany and Hungary, notes FDI MArkets.
Source: dirigentesdigital.com