Investment in energy and natural resources is projected to reach a historic $1.5 trillion in 2025, marking a 6% real-term increase from 2024, according to Wood Mackenzie. This capital expenditure spans power and renewables (excluding transmission infrastructure), upstream oil and gas, and metals and mining. Despite the growth, the rate of increase is significantly slower than in the early 2020s.
Power and renewables remain the dominant investment focus, attracting nearly $800 billion—90% of which is allocated to renewables. This represents a 9% increase, underscoring the sector’s centrality to energy transition efforts. However, the share of investment in low-carbon technologies, which rose sharply from 32% in 2015 to 50% in 2021, has since plateaued. Wood Mackenzie warns that to meet the Paris Agreement’s targets, low-carbon spending must rise by 60% by 2030.
Emerging low-carbon technologies, such as carbon capture and hydrogen, are set to see a 50% increase in investment to $60 billion in 2025. However, rising costs pose a significant risk to these projects. Upstream oil and gas investment is expected to grow by 3% to $550 billion, its highest level since 2018, as financing restrictions ease. In contrast, metals and mining investment is forecast to drop by 13% to $140 billion, with weak prices and delayed nickel and lithium projects as contributing factors.
Oil and gas companies, including major players like ExxonMobil, Chevron, and ConocoPhillips, are positioning themselves for a slower energy transition. Notable moves include Chevron’s proposed acquisition of Hess, which is expected to be reviewed in 2025. Despite record-breaking investment levels, the cautious pace of the energy transition and ongoing capital discipline highlight significant challenges in achieving global climate goals.