• At 11.4 percent and USD 2.8 trillion: Environmental and climate technologies are becoming increasingly important in global trade – growth of 6.3 percent per year on average since 2017
• Extensive trade relations: Germany is the second largest exporter of climate goods after China and the second largest importer after the USA
• KfW committed around EUR 415 billion to environmental and climate financing between 2017 and 2025 – around EUR 50 billion expected for the current year

The share of environmental and climate technologies in global trade rose to 11.4 percent in 2025 – with a trade value of USD 2.8 trillion, representing average annual growth of 6.3 percent between 2017 and 2025. This means that trade in these goods is growing faster than trade in goods as a whole (4.7 percent per year in the same period). The segment of goods used to reduce emissions shows the fastest growth. This segment increased by eight percent per year over the same period. Examples of these goods include products for low-emission mobility, renewable energies or energy-efficient buildings.

These figures come from the new study “The potential of international trade: market dynamics and economic opportunities in climate technologies”. KfW and Deloitte presented the study at the COP31 Climate Change Conference in Antalya.

Investments in clean energy and electrification are expected to reach USD 2.2 trillion globally this year. This puts them at almost twice the level of investments in oil, gas and coal (USD 1.2 trillion). Ten years ago, investment in the two categories was still equal (USD 1.2 trillion each).

During this period, the market value of the most important clean energy technologies has grown by around 20 percent per year to just over USD 1 trillion. Under the current political conditions, it is expected to almost double again to almost USD 2 trillion by 2035. Taking into account the planned policy measures, an increase to USD 3 trillion is a possibility.

Germany is extensively involved in the trade in climate technology. It is in a very good starting position for exports. Based on projections for 2025, it ranks second behind China (26 percent) among the leading economies, accounting for ten percent of the global export value of goods for emissions reduction. It is followed by Japan (seven percent) and the USA (six percent). At the same time, Germany is the second largest importer in this sector with around eight percent of global trade value after the USA (15 percent) and before China (five percent).

Stefan Wintels, Chief Executive Officer of KfW The study sends a clear signal. Climate technologies offer Germany enormous opportunities – thanks to our strong position in this sector, ranked second worldwide. Global trade can be used to accelerate decarbonisation and at the same time strengthen Germany’s economic competitiveness, because trade in climate goods is growing faster than global trade as a whole. That is why we should take these opportunities as a basis for achieving stronger growth again. Climate action is much more than environmental policy; it is now also industrial, trade and regional economic policy.

The results of the study underline KfW’s strategic focus on remaining a driving force in climate action. Since 2017, KfW has committed EUR 415 billion to environmental and climate financing – as a reliable financing partner and trendsetter. For the current year, it expects commitments of around EUR 50 billion for environmental and climate projects (2025: EUR 50 billion). In addition, the bank maintains its strategic objective of 38 percent of its financing going to environmental projects.

In the context of COP 31, KfW is expanding its substantial engagement in Türkiye, which dates back 56 years. Türkiye not only plays an increasingly important geostrategic bridging role, but is above all an attractive market and an important partner for German clean climate technologies.

Hans-Jürgen Walter, Global Leader Sustainable Finance, Deloitte The high market concentration on key components makes our supply chains vulnerable to shocks, production downtime and geopolitical pressure. However, reliable partnerships and targeted diversification in particular can help. Germany cannot win the price war around standardised basic components – our strength lies in the export of high-quality system solutions. We should therefore only build up our own production capacities where real bottlenecks and dependencies are a threat. This is best achieved through a clever interlinking of demand and production promotion, which is far more effective than tariffs.

Further results of the study:

• Germany benefits from international trade: According to a model calculation, module prices for German installers would have been around 83 percent higher in 2020 with national rather than global photovoltaic supply chains. Between 2008 and 2020, the US, Germany and China would have missed out on total savings of approximately USD 67 billion.

• Strategic risks also exist in open markets: China controls around 85 percent of the world’s production capacity for battery cells. In the solar-photovoltaic value chain, it also accounts for over 80 percent of global production capacities. A one-month loss of Chinese battery exports would cause global production losses of around USD 17 billion in the electric car industry alone, with more than half of this being in the EU, according to the International Energy Agency.

• In Germany, there are strong dependencies on imports in categories that are particularly important for climate action – for example for certain photovoltaic components. Overall, Germany is comparatively well positioned: In 41 percent of the relevant product categories, imports are concentrated in a few supplying countries – but this is the lowest share among the 226 economies in the comparison.

The full study "The power of global trade: market dynamics and economic opportunities in climate change mitigation goods" can be downloaded from the following link: Papers and Proceedings on Economics | KfW

For further information see also KfW at COP31 in Antalya | KfW