BloombergNEF has released reports on India, China and the United States for transition to net-zero economy.
United States
The BNEF report on United States said the country’s journey toward a net-zero economy by 2050 could represent a $41 trillion investment opportunity across the nation’s energy system. The New Energy Outlook: US report outlines a cost-effective pathway to decarbonize the US energy system using the lowest-cost technologies.
With the window closing for the US to meet its 2030 Nationally Determined Contribution (NDC) target, the report emphasizes the urgency of immediate action across multiple sectors. Achieving the 2030 target would pave the way for the US to reach net-zero emissions by mid-century, keeping global warming below 2°C.
Central to the transition is the power sector, which will not only decarbonize but also expand to electrify transport, industry, and buildings. According to BNEF’s Net Zero Scenario (NZS), the US must more than quadruple its solar capacity and nearly triple its wind capacity by 2030. Coal usage will shrink to near-zero, while gas plants will continue operating, equipped with carbon capture technology as early as 2027.
“The US is running out of time and emissions budget to stay on a pathway that results in less than 2°C of global warming,” said Thomas Rowlands-Rees, head of North America research at BNEF. He highlighted the need to rapidly shift toward a clean energy system centered on wind, solar, and energy storage to cost-effectively reduce carbon emissions.
The report presents two scenarios: the NZS, which aligns with a 67 percent chance of limiting warming to 1.75°C, and a base-case Economic Transition Scenario (ETS), where no new policies are implemented, resulting in 2.6°C warming. In the NZS, electrification and clean energy provide two-thirds of the emissions reductions needed, with emerging technologies like hydrogen, biofuels, and carbon capture filling the gap. Hydrogen use triples to 52 million tons annually by 2050, while carbon capture capacity surges from near zero to 847 million metric tons per year.
The base-case ETS, however, demonstrates limited progress without further policy support, leading to higher global warming and lower adoption of clean technologies. The report stresses that while this transition will come with significant costs, it presents a massive $41 trillion investment opportunity—20 percent higher than the $34 trillion required under the base-case ETS scenario.
India
The BNEF report on India said opportunity to align with the Paris Agreement’s goal of limiting global warming to well below 2°C is still possible, but it is becoming increasingly difficult to achieve.
BloombergNEF’s (BNEF) New Energy Outlook: India report outlines the urgent need for rapid decarbonization of India’s power sector — the largest source of emissions in the country — with a focus on solar and wind energy expansion and energy storage solutions.
To meet its climate goals, India must more than triple its solar and wind capacity to 494 gigawatts by 2030, the report states. Furthermore, all unabated fossil-fuel-based power generation must be phased out by 2045 under BNEF’s Net Zero Scenario (NZS). The country’s electricity output will need to shift to a mix of renewables like wind and solar, alongside flexible technologies such as batteries, pumped hydro, and gas peakers to ensure grid stability.
“India’s window to stay on a well-below-2-degrees pathway is closing fast,” said Shantanu Jaiswal, head of BNEF in India and Southeast Asia. “Moving rapidly to a clean power system based on wind, solar, and energy storage will be essential to cost-effectively reduce carbon emissions.”
The report presents two climate scenarios for India: the Net Zero Scenario (NZS), aligned with limiting global warming to 1.75°C, and the Economic Transition Scenario (ETS), which assumes no new climate policies and results in a global warming outcome of 2.6°C. Under the NZS, India’s emissions from power, transport, and buildings must peak within this decade, with industrial emissions peaking by the early 2030s. However, if no additional action is taken (as in the ETS), India risks missing the Paris Agreement target, with emissions rising by 175 percent relative to 2005 levels.
Despite the challenges, India is on track to meet its updated Nationally Determined Contribution (NDC) targets, even in the ETS. However, the NZS shows that India’s energy-related emissions must increase by only 106 percent by 2030 compared to 2005 levels, far lower than the rise implied by the ETS or the NDC.
Key Findings of the BNEF Report:
Renewables Surge: By 2050, India’s power system will shift almost entirely to renewable energy, with wind and solar installations projected to reach 4,328 gigawatts. This represents a $2.1 trillion investment opportunity for the industry.
Grid Challenges: As renewables dominate India’s energy landscape, grid balancing will be a major challenge. Energy storage, including pumped hydro and batteries, will need to grow from 5 gigawatts today to over 770 gigawatts by mid-century.
Clean Fuels: Biofuels for shipping and aviation, clean hydrogen, and carbon capture for heavy industry and power will play key roles in decarbonizing hard-to-abate sectors. Hydrogen consumption is expected to jump more than tenfold, reaching 64 million tons by 2050.
Carbon Capture: By 2050, carbon capture in India could scale to 1.4 billion metric tons per year under the NZS.
Investment Needs: India’s energy sector investment under the NZS will reach $12.4 trillion from 2024 to 2050, 34 percent higher than in the ETS.
The report emphasizes the need for flexibility across the energy system, from supply-side technologies like batteries and pumped hydro, to demand-side solutions like electrolyzers and smart vehicle charging. BNEF India analyst Siddharth Shetty, lead author of the report, said, “A renewables-heavy system poses severe grid-balancing challenges. We need flexibility not just in the form of batteries but also through smart demand-side management.”
China
China, the world’s largest emitter, has the potential to accelerate its decarbonization and achieve net-zero emissions by 2050 — 10 years ahead of its current target. This acceleration would play a critical role in helping the world meet the Paris Agreement goal of limiting global warming to well below 2°C.
The BNEF report on China presents two scenarios: the Net Zero Scenario (NZS), which aims for a 67 percent chance of limiting global warming to 1.75°C, and the Economic Transition Scenario (ETS), a base case driven by cost-competitive clean technologies with no additional policy interventions.
Under the NZS, China must see a rapid decline in demand for oil, gas, and coal starting in 2024, with the power and transport sectors leading emissions reduction efforts. Renewable energy capacity, particularly solar and wind, would see unprecedented growth, accompanied by the large-scale adoption of electric vehicles (EVs) and increased deployment of energy storage and nuclear power by 2030.
“China has made significant progress in renewable energy and EV adoption, but it could do more,” said Nannan Kou, lead author and China decarbonization specialist at BNEF. “This report should serve as a call to action for China to set more ambitious targets.”
Key Findings from BNEF’s New Energy Outlook: China:
Power Sector Decarbonization: Transforming the power sector could account for 58 percent of China’s emissions reductions by 2050, driven by renewables and energy storage.
Electrification & Efficiency: End-use sectors like transport, buildings, and industry must electrify, contributing 16 percent of avoided emissions, while efficiency improvements remain critical.
Challenging Technologies: Biofuels for aviation and shipping, carbon capture and storage, and hydrogen in industry are key for tackling the most difficult-to-abate emissions.
Electric Vehicle Growth: EV market share in China is expected to reach 65 percent by 2030 and 95 percent by 2040, contributing significantly to emissions reductions.
Economic Transition: In the base case ETS, wind and solar could make up 52 percent of China’s power generation by 2030 and 70 percent by 2050. China’s energy system is adapting to support high renewable energy penetration with flexible technologies like pumped hydro and batteries.
While both scenarios reduce emissions, the NZS highlights the need for additional policies to achieve China’s net-zero goals. Without further action, fossil fuels could persist in hard-to-abate sectors, limiting emissions reductions.
Investment Needs: Achieving the NZS would require $46.3 trillion in investment by 2050, slightly higher than the $40.7 trillion under the ETS. Most of this investment will be needed for clean power technologies and storage solutions.
“China’s fast-growing sectors like renewable energy, EVs, and energy storage are poised to become engines of economic development,” said Leo Wang, head of China research at BNEF. “They are helping reduce emissions and enhancing energy security without the need for additional policy support.”
China’s current climate commitment aims to lower CO2 emissions per unit of GDP by over 65 percent from 2005 levels by 2030. BNEF’s scenarios suggest that more ambitious targets, including a 43 percent reduction in energy-related emissions by 2035 compared to 2005 levels, would be necessary for China to stay aligned with the Paris Agreement.