Bridging the $18 Trillion Gap: Navigating Capital Challenges for Net Zero Emissions by 2030

Net Zero Emissions
Photo by Chris LeBoutillier

recent study by Boston Consulting Group’s Center for Energy Impact in November 2023 reveals a significant challenge in achieving net zero emissions by 2030. Net zero emissions is the ability to remove an equal amount of carbon dioxide from the atmosphere as is released into it by human activities. The study uncovers an $18 trillion capital gap in the global energy sector. This gap represents the difference between current investments and what is needed to align with net zero goals. 

Read: Global Carbon Dioxide Emissions Escalate Beyond Pre-Pandemic Levels In 2023

Discover: Read more climate studies

Key Findings

  • Capital Challenge: The energy sector faces an $18 trillion investment shortfall, with 90% attributed to electricity and end-use sectors.
  • Transition Barriers: Higher inflation and supply chain disruptions have significantly hindered progress in energy transition.Investor Behavior: Investors demand higher returns due to rising risks, impacting renewable energy investments.Sector Restructuring: Energy sector deals topped $320 billion in 2023, with oil and gas companies leading in acquisitions.Strategic Adaptation: Refining capital strategies and enhancing efficiency is critical for achieving net zero outcomes.
  • Government Role: Policy reforms and subsidies are essential for accelerating investment in low-carbon solutions.

In-Depth Analysis

The study highlights the following crucial aspects:

  • Energy Companies’ Role: Companies in the energy sector are expected to drive 80% of the planned energy transition investments through 2030. However, they face challenges like inflation and rising capital costs.
  • Investment Trends: Energy companies and governments plan to invest $19 trillion in the energy transition over the next seven years, with nearly $2 trillion in new government spending.Oil and Gas Sector: Benefiting from the surge in commodity prices, these companies have substantial cash reserves for investments but face pressure from dividend obligations.Utilities’ Challenges: Utilities, crucial for decarbonization efforts, are restructuring to meet investment needs amidst financial pressures.
  • Renewables Industry: This sector faces hurdles like inflation, higher interest rates, and supply chain disruptions, leading to project cancellations and consolidations.

Strategic Imperatives for Companies

To navigate these challenges, energy companies must:

  • Refine capital allocation.
  • Focus on efficiency in transition investments.
  • Explore strategic mergers, acquisitions, and divestitures.
  • Forge new partnerships and strengthen balance sheets.
  • Stress-test supply chains for efficiency and resilience.

Policymakers’ Role

The study emphasizes the need for policymakers to create conducive market structures and policy guidelines. Incentivizing low-carbon investments and ensuring inclusive energy transition are vital steps for governments worldwide.


The report concludes that bridging the $18 trillion gap requires concerted efforts from the private and public sectors. Innovative financial strategies, robust policy support, and collaborative solutions are essential for a sustainable shift to a greener future.

Climate Crisis 24/7 used generative AI technology to help produce this article, which a human editor at Climate Crisis 24/7 edited. Climate Crisis 24/7 is dedicated to accuracy and transparency; any article that uses AI will be noted. 

Note from the study and authors: The report was authored by experts from Boston Consulting Group, including Rebecca Fitz, Pattabi Seshadri, Jesper Nielsen and others. Read the full study here.

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