A recent study by KfW Research and Deloitte highlights the rapid growth of the global clean technology market, predicting that its volume will double in less than ten years if current trends persist. The report comes ahead of the 30th World Climate Conference (COP30), underscoring both economic opportunities and challenges linked to climate action.
According to the study, demand for clean technologies and related capital investment increased at an average rate of 7.3 percent annually from 2010 to 2022, accelerating to 9.6 percent per year between 2019 and 2024. By 2045, projections indicate a possible quadrupling of market size.
Germany's clean technology sector holds a strong position internationally. Currently, German green tech exports account for about 13 percent of world trade in this segment—higher than Germany’s overall share in global exports. Green technologies contribute nine percent to domestic gross value added, eight percent to exports, and provide jobs for about 7.5 percent of the workforce. Key areas include energy generation and storage, industrial decarbonisation, digitalisation, circular economy initiatives, and new materials development.
The financial impact of climate-related damage worldwide has exceeded USD 1 trillion over the past five years, according to data from the Emergency Events Database. Meanwhile, investor interest in sustainability remains high; around 88 percent of global investors are currently interested in sustainable investments.
"In light of the upcoming UN Climate Change Conference, it is important to underscore the economic opportunities of clean technologies," said Stefan Wintels, CEO of KfW. He noted that even with some countries withdrawing from international agreements such as Paris Accord, nations responsible for approximately three-quarters of global GDP and CO2 emissions have committed to achieving greenhouse gas neutrality targets.
"Integrating sustainability into corporate strategy strengthens companies’ resilience, reduces risk and creates long-term value. Investments in environmentally friendly technologies offer the opportunity to participate in fast-growing markets." Wintels emphasized KfW's ongoing commitment: since 2017 it has pledged around EUR 362 billion for environmental and climate financing globally and plans a further budget allocation of about EUR 40 billion for 2026.
Hans-Jürgen Walter, Global Lead Sustainable Finance at Deloitte stated: "Numerous examples of companies demonstrate that investing in climate action not only helps to reduce operational, financial and reputational risks, but also offers strategic advantages in the course of decarbonisation and climate adaptation. Companies that rely on sustainable business models at an early stage strengthen their competitiveness and can make targeted use of new growth markets."
Despite Germany’s strengths in innovation across several sectors relevant to clean technology, the study notes increasing international competition requires enhanced innovative capacity domestically.
Additional findings show that companies benefit from improved risk profiles due to reduced exposure to volatile energy prices by adopting green practices. Falling costs for renewable energy sources also present cost-saving opportunities. Regulatory measures combined with growing interest in sustainable finance are leading to more favorable financing conditions.
Currently global investment flows into clean energy amount to about USD 2 trillion annually—double those directed toward fossil fuels—marking a reversal compared with ten years ago when fossil fuel investment dominated.
The report acknowledges short-term hurdles: one third of necessary emission reductions by mid-century depend on emerging technologies still under development or demonstration; electricity price stability will hinge on efficient system upgrades; lack of consistent international carbon pricing frameworks complicates green investment returns.
To address these issues and harness potential benefits from climate action efforts globally—and within Germany—the study recommends policy interventions including risk-sharing mechanisms between public/private investors for green projects; clearer standards/certifications; stable carbon pricing pathways with compensation measures; expanded support for research/development as well as start-up innovation activity.
The full study "The economic benefits of climate action – How decarbonization can enhance competitiveness and growth" is available online (PDF).