‘New industrial sunbelt’ countries are poised to overtake the world’s biggest economies in the clean industry race; that’s according to new research from Mission Possible Partnership (MPP). In a new report, MPP analysed developments within the clean industry space. It found that China continues to lead ahead of the US and EU, however industrial production is diversifying beyond historic bases, opening the door to new markets to drive future growth in cleantech.
The researchers claim that currently China is the frontrunner in clean industry development, securing a quarter of the estimated $250 billion of investment in clean plants to date, followed by the US (22%) and the EU (14%). Yet, a group of emerging nations - which include India, Egypt and Brazil – make up what MPP dub the ‘new industrial sunbelt’ and are rapidly gaining on the current market leaders[i].
These newly industrialising countries are capitalising on favourable conditions for renewable energy production, as well as building momentum in sectors at the forefront of a new clean industrial revolution. MPP suggests that this points to a potential industrial realignment, as the production of materials, chemicals and fuels moves across geographies and new trade corridors emerge.
They argue that the abundant natural resources the ‘new industrial sunbelt’ offers are now being harnessed to provide solar energy, with supportive policy environments and cost advantages combining to create ideal conditions for new industrial processes.
CEO of MPP and Executive Director of the ITA, Faustine Delasalle, said:
“Just like the industries of yesterday located near the coal mines which powered them, the new generation of energy-intensive industrial plants will go to where they can access abundant, reliable, cheap, clean electricity to produce materials, chemicals and fuels. The industrial heartlands of the past will have to be smart and cooperate if they want to retain their leading positions.”[ii]
MPP estimates that ‘new industrial sunbelt’ countries hold more than half (59%) of the $1.6 trillion global investment pipeline in the clean industry space, compared with 18% for the US, 10% for the EU, and just 6% for China. Projects span key sectors, including aluminium, chemicals, cement, aviation and steel.
The research singles out the production of ammonia, critical to global food chains as a breakout market where ‘new industrial sunbelt’ countries host over three quarters of all commercial-scale green ammonia production facilities planned globally (at both FID and announced)
Green ammonia is in fact the fastest growing segment according to the researchers (28 plants at FID, 344 announced) followed by sustainable aviation fuels (22 operational plants, seven at FID and 144 announced). Both segments present a strong business case, the report argues, with clean ammonia being a drop-in solution for the fertiliser sector and sustainable aviation fuels benefiting from regulatory and policy frameworks, as well as the continuing demand for air travel.
The research did however discover a persistent bottleneck, whereby the pace of new commercial project announcements remains strong, yet the conversion from announced projects to final investment decisions remains too slow. MPP claims that if the rate of conversion seen in the last six months were to continue, it would take approximately 40 years for all announced projects to begin construction. Subsequently, to unlock the full pipeline will require a fivefold increase in investment, along with concerted action from governments, financial institutions and corporate buyers. The researchers stress that governments, in particular, can secure industrial leadership by accelerating project financing through policy measures tailored to their unique resource and economic profile.
[i] Global Project Tracker Insights Update June 25
[ii] Global Project Tracker Insights Update June 25 Press Release
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
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