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Infrastructure & Environment
The United States, similar to many other countries, likely sits poised at the beginning
of an infrastructure renaissance, reflecting the demands of several powerful converging global trends, including
climate change, electrification, technology advancements, and aging assets. As the world struggles to reduce its carbon footprint, vast swaths of the built environment are being remade to become more energy
efficient and resilient. This includes rebuilding and greening existing infrastructure, developing renewable energy sources, and utilizing more sustainable technologies in the mobility and agriculture sectors.
Global Carbon Emissions Over Time
Carbon emissions have risen sharply in recent decades, necessitating the development of renewable energy sources and electrification as the race to net zero accelerates.
Global Carbon Project. (2024, November 13). Global Carbon Budget 2024.
Infrastructure
Paving the Way Forward
Structural Trends at the Heart of Infrastructure Development
The infrastructure investment boom, fueled by trillions in government funding and private investments, is being driven by a host of structural trends taking place around the globe.
Global X ETFs; Brookfield (2024, Jun 17), Why Infrastructure Is a Compelling Investment for All Cycles.
Aging Infrastructure Assets Pose Concerns Across Developed Economies
Decades-old bridges and outdated power grids amplify the risks associated with climate change and the challenges brought on by shifting demographics. In the United States, much of the infrastructure is nearing or has surpassed its life expectancy, as exemplified by the one in three bridges in need of repair.
American Society of Civil Engineers (2021, March 3), 2021 Report Card for America’s Infrastructure.
Share of Power Grid Infrastructure Assets Over 20 Years Old
International Energy Agency (IEA) (2023, October 17), Electricity Grids and Secure Energy Transitions; American Society of Civil Engineers (2021, March 3), 2021 Report Card for America’s Infrastructure;
Smart City Korea (2024, March 7), Japan’s aging infrastructure maintenance, response to digitalization.
The American Manufacturing Investment Boom
Since January 2021, $988 billion in private manufacturing and clean power investments has been announced, with the majority following the enactment of the Infrastructure Investment and Jobs Act in November 2021. As a result, manufacturing is outperforming other construction segments.
The White House (n.d.), Investing in America: Invest.gov. Accessed November 1, 2024.
Manufacturing Is Expanding in the United States
New manufacturing investments in the United States—spanning industries and regions across the country—could create significant opportunities for infrastructure development companies over the coming years.
Micron (2022, September 1), Micron to Invest $15 Billion in New Idaho Fab, Bringing Leading-Edge Memory Manufacturing to the US; Nucor (2023, February 22), Nucor to Build New Transmission Tower
Production Plant in Alabama; Qcells (2023, October 13), Qcells North America Completes Dalton Factory Expansion; Thomas (2024, March 3), Is Apple Bringing Jobs, Production Back to U.S.?; Toyota (2023,
October 31), Toyota Supercharges North Carolina Battery Plant with New $8 Billion Investment; TSMC (2024, April 8), TSMC Arizona and U.S. Department of Commerce Announce up to $6.6 Billion in Proposed
CHIPS Act Direct Funding, the Company Plans Third Leading-Edge Fab in Phoenix; Mich Auto (2024, January 2), ‘Future May be Further Out’: Michigan Plays Long Game on Electric Vehicles.
Infrastructure development is likely to gain pace over the coming years as public and private investments unlock significant opportunities. The
buildout of new infrastructure will likely span traditional assets, such as bridges, roads, and ports, as well as next-gen assets like EV charging infrastructure and smart grids.”
MADELINE RUID
Research Analyst,
Global X ETFs
Global X ETFs
CleanTech
A Renewable Future
A Warming Planet
With global surface temperature 1.36°C warmer than in the pre-industrial period, temperatures are reaching new highs, leading to policy changes that are creating new opportunities in CleanTech.
National Aeronautics and Space Administration (NASA) (n.d.), Global Temperature. Accessed October 24, 2024; National Centers for Environmental Information (n.d.), Climate at a Glance Global Time Series.
Accessed October 31, 2024.
CleanTech Investments Are on the Rise — But More Is Needed
Global cleantech investments have tripled since 2019 to reach $2 trillion annually, but an estimated $5 trillion annually from 2023 to 2050 is needed to limit warming to 1.5°C and avoid the worst impacts of climate change.
BloombergNEF (2024, January 30), Energy Transition Investment Trends.
International Renewable Energy Agency (2023, June), World Energy Transitions Outlook 2023: 1.5°C Pathway.
Solar and Wind Are Driving Power Growth
Favorable policies, technology advancements, and declining costs are reasons for the robust growth of the utility-scale solar and onshore wind power segments. Together, they are projected to account for 89% of total power capacity additions through 2035.
BloombergNEF (2024, May 21), New Energy Outlook 2024.
BloombergNEF (2024, May 21), New Energy Outlook 2024.
Exponential Growth in Energy Storage Installations
Because renewables produce no power when the sun isn’t shining or the wind isn’t blowing, energy storage systems are quickly becoming an integral part of power grids.
BloombergNEF (n.d.), Annual Global Energy Storage Installations, MW (Data Set). Accessed on October 31, 2024.
John Deere’s Farm of the Future
Farmers are facing an increasing number of challenges, including less predictable weather patterns, potentially less water for irrigation, and labor shortages. Autonomous tractors and precision
agriculture, where farmers manage plant-by-plant rather than across a whole field, offer help for the environment and farmers’ bottom lines.
Hydrogen Is Decarbonizing Multiple Sectors
With a growing number of industries using hydrogen to reduce greenhouse gas emissions, global hydrogen demand is projected to increase from 97 million metric tons (MMt) in 2023 to around 150MMt by 2030.
Bloomberg (2019, August 21), Hydrogen’s Plunging Price Boosts Role as Climate Solution.
BloombergNEF (n.d.), Hydrogen Demand Segments (Data Set). Accessed October 30, 2024.
Limiting the effects of climate change requires rapid, deep, and sustained greenhouse gas emission reductions. Technology-driven solutions, such as
renewable energy, energy storage, low-carbon hydrogen, and precision agriculture, can move the world closer to net-zero emissions.”
MADELINE RUID
Research Analyst,
Global X ETFs
Global X ETFs
Mobility
Driving the Next Era
of Transportation
Global Vehicle Sales
Accommodative government policies, electrification efforts by automakers, and increased buy-in from consumers around the world are making EVs a mainstream segment of the transportation sector.
Rho Motion (2024, October), EV & Battery Quarterly Outlook: Q3 2024.
EV Battery Demand Is Expected to Spike Worldwide
As battery manufacturing becomes increasingly global, China is expected to remain the leader in EV battery demand and production capacity. But more companies may invest in gigafactories in Europe and North America to meet demand and secure supply chains.
Rho Motion (2024, October), EV & Battery Quarterly Outlook: Q3 2024.
Growing Supply Shortage for Key Battery Minerals
Because EVs require up to 6x more minerals than internal combustion vehicles, the auto industry is poised to become a major growth driver for minerals.
International Energy Agency (IEA) (2024, May 17), Critical Minerals Data Explorer.
EVs are no longer a niche segment within the transportation sector. As EVs become even more widely adopted, there could be significant opportunities
for companies across the entire EV value chain, from miners and battery manufacturers to automakers.”
MADELINE RUID
Research Analyst,
Global X ETFs
Global X ETFs