In the past decade, interest in a global transition to an energy system that relies more heavily on renewables has increased, in response to wide-ranging goals related to climate change and decarbonisation, energy security, job creation, equity and energy access. To achieve these goals, decision makers at various levels have enacted new renewable energy policies and strengthened existing ones.1 Policy support for renewables – whether directly through, for example, renewable energy mandates and incentives, or indirectly through measures such as carbon pricing and fossil fuel bans – remains critical for driving the energy transition, particularly in harder-to-decarbonise sectors such as heating in buildings, as well as the transport and industry sectors.
By the end of 2021, nearly all countries worldwide had implemented at least one regulatory policy in direct support of renewablesi.2 (→ See Figure 14.) Although most of this activity continued to focus on the power sector, the number of renewable energy policies in both transport and heating increased for the first time since 2018 (albeit with weaker policy frameworks).3 In addition to policy developments at the national level, cities increasingly have passed policies in support of renewables, although these are not the focus of this analysis. (→ See the Renewables in Cities chapter for a discussion of policy developments at the city level.)
The push to decarbonise is an increasingly important driver of renewable energy support policies.4 In 2021, governments around the globe announced a flurry of commitments towards mitigating climate change through reductions in greenhouse gas emissions.5 In addition, rising energy prices during the year and the Russian Federation's invasion of Ukraine in early 2022 have heightened policy makers' concerns about energy security, leading to growing interest in renewables.6
Globally, decision makers are converging on the key role of electrification in decarbonisation efforts and have enacted policies to support greater use of electricity, which is increasingly generated by renewables.7
CLIMATE CHANGE POLICY AND RENEWABLES
Policies aimed at mitigating climate change can indirectly stimulate the deployment of renewables by mandating a reduction or elimination of greenhouse gas emissions.8 Most climate change policies related to energy do not focus explicitly on renewables; however, these policies play a critical role in increasing interest in – and uptake of – renewable energy technologies across all end-use sectors.
The year 2021 was important for climate policy developments. After the United Nations climate negotiations were postponed in 2020 due to the COVID-19 pandemic, stakeholders convened in November 2021 for resumed talks in Glasgow, Scotland.9 Although countries' revised Nationally Determined Contributions (NDCs) – which outline their commitments to reducing emissions under the Paris Agreement – were due in 2020, they were given additional flexibility to submit their new or updated NDCs ahead of the Glasgow meetings.10
Climate change policies
play a critical role in increasing interest in – and uptake of – renewable energy technologies across all end-use sectors.
In total, 151 countries submitted new or updated NDCs in 2021, with most of the submissions showing increased ambition on reducing emissions.11 However, not every NDC contains a quantified renewable energy target, and those that do focus mainly on the power sector; only 30 of the submitted NDCs explicitly mentioned heating or transport, and only 13 NDCs outlined a commitment to a share of renewables in the total energy mix.12
Numerous countries, states and provinces implemented additional climate change policy during 2021, whether by setting targets (including commitments to net zeroii), banning or phasing out the use of fossil fuels, or increasing the cost of fossil-based energy through carbon pricing.13 (→ See Figure 15.) However, while commitments to decarbonisation have been gaining traction globally, this has not always led to the replacement of existing fossil fuels with renewable energy sources.14
Greenhouse gas emission targets (including net zero and carbon-neutral targets) reflect goals specifically set for reducing emissions. During 2021, many countries announced new greenhouse gas emission targets.15 For example, Zimbabwe committed to 40% emission reductions by 2030 compared to business as usual (conditional on international finance support), and Lebanon raised its target to a 20% reduction by 2030, up from 15% previously.16
More than 17 countries announced new net zero commitments in 2021, many in advance of the November climate talks.17 By year's end, at least 135 countries as well as the European Union (EU) – together accounting for around 88% of global emissions – had in place some form of net zero target (including announcements and targets under discussion).18 The EU made its climate neutrality target for 2050 legally binding and set an interim target for 55% emission reduction by 2030.19 Brazil passed a net zero target for 2070, and India for 2050.20
The degree of implementation varies, as many net zero targets are not backed by specific legislation.21 (→ See Figure 16.) Of countries' 2021 targets, only around a fifth were enshrined in law, around half were included in some type of policy and the remaining third were in the declaration stage.22 Eight countries (Benin, Bhutan, Cambodia, Gabon, Guinea-Bissau, Guyana, Liberia, Madagascar and Suriname) declared they had already achieved net zero emissions by late 2021; however, these places are considered to still be developing and include in their calculations the role of forests as natural carbon sinks.23 Meanwhile, only 84 of the 135 national governments with net zero targets also had economy-wide renewable energy targets (and only 36 had targets for 100% renewables), highlighting the gap between commitments to net zero and plans to scale up renewables to help achieve this.24
Carbon pricing policies aim to increase the price of fossil-based energy compared to non-fossil sources such as renewables (and nuclear power). By the end of 2021, such policies were in place in 65 jurisdictions at the national and sub-national levels, covering an estimated 21.5% of global greenhouse gas emissions.25 At least four countries (Austria, China, Germany and Indonesia) and Washington state (US) introduced new carbon pricing policies in 2021, which are set to go into effect in 2023.26 China launched the world's largest emission trading scheme for power generation as part of its targets to achieve peak emissions by 2030 and carbon neutrality by 2060.27
Policies banning or phasing out the use of fossil fuels can stimulate the uptake of renewables in various end-use sectors, depending on the fuel being targeted. In 2021, the most common type of fossil fuel ban enacted at the national and state/provincial level was on coal, which is used primarily to generate electricity (and, to a lesser extent, to provide heat for buildings and industrial processes).28 Coal bans or phase-outs can indirectly stimulate investment in renewable power capacity, although they also can increase the uptake of nuclear generation. At the same time, increases in wholesale energy prices have led national governments to put in place measures to shield consumers from the direct impact of rising energy prices.29 (→ See Box 6 and Table 3.)
BOX 6. National Policies to Shield Consumers from Rising Energy Prices
With the energy crisis unfolding in late 2021, followed by the Russian Federation's invasion of Ukraine in early 2022, countries in Europe and around the world have experienced energy price hikes. To shield consumers from these increases, several governments have implemented short-term policies to mitigate the price effect. Most of the measures have focused on lowering energy taxes on fossil fuels, with many specifically targeting low-income groups, which have been among the most vulnerable to rising prices. (→ See Table 3.)
In addition, several countries have planned medium-term strategies to reduce reliance on fossil fuels and increase national and regional energy security. For example, much of the discussion in the EU has focused on reducing reliance on Russian fossil fuels (in particular natural gas), including by speeding up renewable energy solutions. (→ See Sidebar 1 in Global Overview chapter.)
By year's end, at least seven countries had committed to banning or phasing out coal either at the national or state/provincial level.30 Indonesia's state-owned energy utility announced that it would end the construction of new coal-fired power plants after 2023 (although more than 20 gigawatts, GW, of new coal capacity will be built until then).31 In Europe, Hungary expedited the closure of its last coal-fired power plant by five years (targeting 2025 instead of 2030), and Bulgaria, Germany, Romania and the United Kingdom committed to exiting coal, with timelines varying between 2024 and 2040.32 At the state level, Oregon (US) banned the expansion or new construction of coal-fired as well as natural gas and other fossil fuel plants.33 In addition to individual country commitments, a key outcome of the Glasgow climate talks was an agreement by more than 40 countries and several sub-national jurisdictions to phase downiii “unabated” coal power generationiv by the 2030s in developed economies and by the 2040s in developing economies.34 (→ See Global Overview chapter.)
In the buildings sector, bans or support for phasing out fossil fuels for heating (such as heating oil and fossil gas) have the potential to stimulate the use of renewables. While such bans typically are enacted by municipalities (→ See Global Overview chapter.), in 2021 at least two countries took this step: Slovenia banned fuel oil and coal for heating starting in 2023, and France banned fossil gas for heating in new single-family homes starting in mid-2022 (and in new collective housing starting in 2024).35 At the sub-national level, the province of Quebec (Canada) banned fossil fuel heating in new construction.36
In the transport sector, bans on fossil fuels for road transport can incentivise biofuels-based transport and the use of electric vehicles. While electric vehicles are not a renewable energy technology in themselves, they provide a critical entry point for higher uptake of renewables in transport, especially if combined with policies for renewable electricity generation. Bans on internal combustion engine (ICE) vehicles also support uptake of electric vehicles and have been the most widespread type of ban.
had committed to banning or phasing out coal either at the national or state/provincial level.
Policy support for decarbonisation of the transport sector increased significantly in 2021, with new announcements bringing the total number of national and sub-national jurisdictions with bans on fossil fuel use in road transport to 30, up from 26 in 2020; in addition, a partial ban exists in Mexico.37 Canada banned the sale of fuel-burning new cars and light-duty trucks starting in 2035, the United Kingdom banned the sale of new petrol and diesel heavy-goods vehicles and buses by 2040 (and the sale of smaller diesel trucks from 2035), and Spain enacted a law prohibiting the sale of fossil fuel vehicles by 2040.38 Singapore's new Green Plan includes ceasing sales of diesel cars and taxis from 2025 and requiring all new car and taxi registrations to be “cleaner energy” models starting in 2030.39 At the state level, New York (US) enacted a law requiring all passenger vehicles sold in the state to be emission-free by 2035 and to eliminate emissions from medium- and heavy-duty vehicles by 2045.40
Ending government support for fossil fuel production and exploration and enacting bans on funding for international fossil fuel projects and on fossil fuel exports also have the potential to indirectly support the uptake of renewables. In 2021, China, Japan and the Republic of Korea committed to ending funding for the construction of new coal power projects overseas (but not necessarily domestically).41 Spain banned all new coal, gas and oil exploration and production permits.42 Canada announced that it would stop exporting thermal coal (but not other types) by 2030 at the latest.43
iThis chapter is intended to be only indicative of the overall landscape of policy activity and is not a definitive reference. Data from GSR 2021 should not be used as a comparison, due to updated methodology and data availability. Generally, listed policies are those that have been enacted by legislative bodies. Some of the listed policies may not yet be implemented, or are awaiting detailed implementing regulations. For further information, See endnote 2 for this chapter.i
iiSee Glossary for definition.ii
iiiUltimately, the agreement was to “phase down”, rather than “phase out” coal generation.iii
ivThis refers to coal burning that is carried out without some form of carbon capture and storage.iv