Clean Energy Trade to Surge: EV & Battery Markets Lead Transformation by 2050

The global shift towards safer, lower-carbon energy sources is fundamentally reshaping international trade patterns. While currently representing just 2.2% of total cross-border merchandise trade in 2024, clean energy’s share is poised for significant growth as the transition accelerates. Last year alone, investments in low-carbon assets reached a record $2.3 trillion, an 8% increase over 2023.

The Rise of Electric Vehicle and Battery Trade

BloombergNEF has, for the first time, developed projections of trade flows through 2050, encompassing 28 geographies and 28 product categories impacted by this energy transition. These include electric vehicles (EVs), solar modules, batteries and the metals required for battery production, alongside traditional fossil fuels and internal combustion engine (ICE) vehicles. The projections are based on multiple scenarios from BloombergNEF’s proprietary New Energy Outlook report and those developed by the Network for Greening the Financial System.

A Tripling in EV and Battery Commerce

Under BloombergNEF’s Central Economic Transition Scenario, the value of trade in EVs and batteries is expected to surge to $880 billion by 2035, a dramatic increase from $234 billion in 2024. This scenario assumes continued cost reductions in clean technologies at recent rates and no major new climate policies from governments. The growing adoption of EVs is simultaneously projected to reduce trade in ICE vehicles to $340 billion in 2035 – a 39% decrease from 2024 levels.

Did You Know? Investments in low-carbon assets reached a record $2.3 trillion in the past year, marking an 8% increase from the previous year.

Fossil Fuel Trade Faces Stagnation

Trade in fossil fuels, largely driven by crude oil and its derivatives, is expected to remain around $3 trillion until 2030. Following this, a prolonged period of decline is anticipated through 2050 under the Economic Transition Scenario. While natural gas trade may expand during this period, it will not offset the declining demand for oil.

Despite this projected decline, fossil fuels are still expected to account for over half of global energy flows throughout the forecast period. However, under BloombergNEF’s Net Zero Scenario – which assumes countries implement policies to achieve net-zero emissions by 2050 – fossil fuel trade could fall below $1 trillion by 2040.

Expert Insight: The projections highlight a significant reorientation of global trade, moving away from traditional fossil fuel dependencies towards a new landscape dominated by clean energy technologies. This shift presents both opportunities and challenges for nations as they adapt their economies and trade strategies.

Diverging Paths for the US and China

Both the United States and China are currently net importers of the 28 energy-related goods analyzed in the report, but their trajectories through 2050 are markedly different. China is already the world’s largest exporter of clean technologies and is projected to account for at least one-third of global clean energy exports through 2050 under the Economic Transition Scenario. The expansion of EV and battery exports, coupled with domestic electrification, could transform China’s $266 billion energy trade deficit in 2024 into a surplus by the late 2030s.

The United States, while also a net importer, benefits from significant exports of oil and gas. However, as the energy system transitions, US exports of fossil fuels are expected to stabilize and then gradually contract, while imports of clean energy products increase. This could leave the US with a negative energy trade balance of around $130 billion through 2050. The European Union’s energy trade deficit is projected to shrink by 29% by 2035, driven by reduced crude oil imports and increased EV exports, though competition with China in global vehicle markets is expected to be intense.

Frequently Asked Questions

What is driving the shift in energy trade flows?

The global transition towards lower-carbon energy sources is the primary driver, leading to increased demand for clean energy technologies like EVs, batteries, and solar modules, and decreased demand for fossil fuels.

What is the Economic Transition Scenario used by BloombergNEF?

The Economic Transition Scenario assumes that the cost reductions of clean technologies will continue at the same pace as in recent years, and that governments will not implement new, large-scale climate policies.

How will China’s role in energy trade change by 2050?

China is projected to become a major exporter of clean energy technologies, potentially shifting from a $266 billion energy trade deficit in 2024 to a surplus by the late 2030s.

As global energy markets evolve, will nations be able to successfully navigate the economic and geopolitical implications of these shifting trade patterns?