Cleantech Market Forecast: Top Trends That Will Affect Cleantech in 2024

Experts eyeing developments in EVs, wind and solar

Electric vehicle (EV) adoption continues to pick up pace, with research firm Markets and Markets estimating that the global EV market will experience a CAGR of 13.7 percent between 2023 and 2030.

Recent events back up that prediction. Rho Motion reported that November sales for EVs and plug-in hybrids around the world were 20 percent higher compared to a year ago. Meanwhile, US President Joe Biden's pledge to construct a national network of EV charging stations, combined with his US$89.9 billion investment to modernize public transit with electric buses, has been a significant driver of sustainable transportation.

Speaking to INN, Cleantech Group’s DeOrsey said he sees momentum building in ancillary EV technologies.

“Mature technologies like EV charging and certain types of battery technologies are well past commercialization and (we’re) not going to see a ton of new entrants, but they're growing in the later rounds. I would see this as continuing to accelerate, and it's not limited to just producing batteries. It's also going to be new and novel technologies for extracting (battery) materials (like) lithium (and graphite). We've seen a lot of action there. Also newer stuff in manufacturing for batteries like new types of nano-deposit technologies," he said during the interview.

Jackson also sees the value in mineral extraction. “Critical minerals are key to so many aspects of technology pathways to decarbonize. Batteries, (as well as) a lot of the newer technologies, will require critical minerals," she noted.

Looking over to wind and solar, solar energy production is set to outshine wind energy production in 2023, and this trend is expected to continue in 2024 thanks to material innovation in the thin film space. “(Specifically), solar perovskite technology is starting to get a little bit of a boost from the Inflation Reduction Act,” said DeOrsey. Perovskite is a type of mineral that can be used as a thin film in solar cells. He added, "Things that can expand the installation of solar are picking up, (and it’s) getting down to new types of technology versus scaling of the incumbents."

The US Energy Information Administration posits that in 2024, solar and wind power will produce more electrical power than coal for the first time. It estimates that coal will fall roughly 90 billion kilowatt-hours behind renewable energy.

Could agriculture be the key to scalable hydrogen production?

Food and Agriculture Day at COP28 brought discussions to the fore about how to make food production more sustainable and reduce GHG emissions. “There's a lot of opportunity to help decarbonize (agriculture), and we're seeing quite a lot of investment happening there,” said Foresight Canada's Jackson.

In correspondence with INN, Jo Raven, who was involved in COP28 and is the director of thematic research and corporate innovation at the FAIRR Initiative, said that historically, the agri-food industry has only received 4 percent of global climate financing, even though it is highly impacted by and vulnerable to climate change.

Raven pointed to alternative protein sources as key to decarbonizing the global food system. “The Food and Agriculture Organization Roadmap calls for dietary guidelines to … include novel technologies such as alternative proteins, while the UN Environment Program recognizes the environmental benefits. This focus at COP28 on the food sector and its need for transformation signals to companies and investors that there is international support for investment in the sector."

DeOrsey posited that the agriculture sector could be a major driver for one area that's likely to see some growth in 2024, which is the development and adoption of green hydrogen. Green hydrogen has the potential to significantly reduce the carbon footprint of agriculture and other industries. “I think agriculture gets overlooked, but that's a space that is probably going to see quite a bit more momentum,” he explained to INN.

“(There is) more demand for newer and better fertilizers (and to) decarbonize the ones that are out there already. Decarbonizing is critical, and you get there through green hydrogen. So I think one of the spaces that you're going to see a lot of continued motion in 2024 is around hydrogen and hydrogen production.”

Jackson agreed with that sentiment, but recognized the challenges that still lie in the way. “It's a clean energy carrier, but a lot of people are looking at just where hydrogen plays a role. The reality is that for investment to be attractive, we also need to figure out the demand.” Many industries would benefit from hydrogen production, but producing and commercializing green hydrogen to scale is still very expensive and challenging.

The agri-food industry could play a vital role in developing the infrastructure. “(We’re) seeing more collaborations between fertilizer producers (and) electrolyzer companies to produce the green hydrogen and then get green ammonia,” said DeOrsey, pointing to Norwegian fertilizer company Yara (OTC Pink:YRAIF) as an example. The company’s subsidiary, Yara Clean Ammonia, has been piloting the production of green ammonia in plants powered with renewable energy for a few years, producing green hydrogen as a by-product.

Investor takeaway

In addition to the trends discussed, investors can expect to see more collaborations and M&A activity as companies strive to align themselves with ESG best practices. “We certainly (started) to see a bit of a market consolidation in the cleantech space (in 2023), and I think we'll continue to see that going into the new year,” said Jackson.

While companies with a vested interest in CCUS could increase investment in the carbon management and emissions tracking space, some players could exit the market due to the abundance of technology available. “There's so much of it out there,” said DeOrsey. “I think the market will continue to grow, but I would see the competitive pool start to shrink a little bit. (Producing) hardware that can generate more data, I see a lot more potential for innovation there. Also in things that are (sustainable), but not emissions-related. That's where there's growth potential.”

The bottom line is that the overall cleantech market is expected to continue growing. Investors interested in the cleantech industry should strive to remain vigilant in the changing landscape in order to succeed.