Lithium ETFs and Clean Energy: Tapping Into the $2.3T Energy Transition Wave

The world’s investment in clean energy and low-carbon solutions reached a historic milestone of $2.3 trillion in 2025, reflecting an 8% year-over-year surge according to BloombergNEF’s latest Energy Transition Investment Trends report. Within this massive capital reallocation, lithium and battery technology have emerged as critical components, particularly as energy storage and electric vehicle adoption accelerate globally. For investors seeking exposure to this structural shift without picking individual winners, lithium ETFs and diversified clean energy exchange-traded funds provide a strategic entry point into one of the most dynamic sectors reshaping global markets. Understanding the trends behind this record investment and identifying the right ETF vehicles can help you position your portfolio for sustained long-term gains.

Lithium’s Strategic Importance in the Global Energy Transition

The $2.3 trillion energy transition investment landscape reflects more than just renewable power generation—it encompasses a comprehensive ecosystem including grid modernization, energy storage infrastructure, and electric vehicle manufacturing. Lithium sits at the nexus of this ecosystem. Companies like Albemarle Corp., Lithium Argentina, and Lifezone Metals have become central to this story, as their lithium products fuel the battery technology powering both energy storage systems and electric vehicles.

Despite regional headwinds, global investment momentum has remained resilient. The United States saw modest 3.5% growth to $378 billion despite a challenging regulatory landscape marked by policy shifts in 2025. China, though still commanding $800 billion in transition spending, experienced its first renewable energy funding decline since 2013 due to new power market regulations. However, the European Union surged ahead with an 18% investment increase, while India climbed 15%, with the Asia-Pacific region now accounting for 47% of global energy transition capital. This diversified investment pattern demonstrates that the energy transformation has evolved into a genuinely global phenomenon, no longer dependent on any single region’s policy environment.

The International Energy Agency projects that global renewable power capacity will double by 2030, adding approximately 4,600 gigawatts. To achieve climate goals, BloombergNEF analysts estimate annual transition investment must average $2.9 trillion over the next five years. Two primary catalysts are expected to sustain this growth: energy security concerns driving grid and storage infrastructure investment, and the explosive demand from data centers and artificial intelligence applications, estimated to require around $500 billion annually in clean electricity infrastructure.

Why Lithium ETFs Matter for Energy Transition Investing

Lithium’s role in enabling this transition cannot be overstated. The metal is essential for battery manufacturing—a technology that underpins both renewable energy storage and electric vehicle powertrains. As nations prioritize energy independence and grid reliability, lithium-focused and diversified clean energy ETFs offer a more balanced approach than individual stock selection. These funds provide instant exposure to multiple subsectors including renewable generation, grid infrastructure, energy storage systems, electric transportation, and the technology providers enabling the clean energy ecosystem.

Renewable energy investment specifically channeled $690 billion into the global energy transition in 2025, but energy storage and vehicle electrification represent equally important growth vectors. ETFs tracking this space benefit from a hedged approach: if renewable capacity growth accelerates, fund holders gain exposure; if lithium-dependent storage and transportation technologies drive returns, the portfolio remains positioned.

Top Lithium and Clean Energy ETFs to Consider

For investors committed to participating in this multibillion-dollar structural shift with reduced single-company risk, the following ETFs deserve close attention:

iShares Global Clean Energy ETF (ICLN)

ICLN maintains net assets of $2.17 billion across a portfolio of 102 companies involved in solar, wind, and renewable energy production. The fund’s top holdings include Bloom Energy ($BE), which specializes in fuel cell technology (10.91% allocation), Nextpower ($NXT), a smart solar tracker developer (9.63%), and First Solar ($FSLR), a major photovoltaic panel manufacturer. Over the past year, ICLN delivered gains of 66.8% for shareholders. The fund’s expense ratio stands at 39 basis points, and it maintained solid trading volume of 4.69 million shares in recent sessions.

ALPS Clean Energy ETF (ACES)

With $122.9 million in assets under management, ACES targets U.S. and Canadian clean energy companies across renewables and clean technology. Its top three positions are Albemarle Corp. ($ALB), a critical supplier of lithium compounds for energy storage batteries (6.60% weight), Nextpower ($NXT) at 5.94%, and Enphase Energy ($ENPH), which manufactures solar microinverters and provides energy storage management systems (5.80%). ACES appreciated 44.3% over twelve months, charges 55 basis points in fees, and recorded trading volume of 0.08 million shares recently.

Invesco WilderHill Clean Energy ETF (PBW)

PBW’s market capitalization reaches $784.4 million, providing exposure to 63 publicly traded U.S. companies advancing clean energy and conservation technologies. Primary holdings include Bloom Energy ($BE) at 2.41%, Lithium Argentina ($LAR), a lithium mining and production developer (2.22%), and Lifezone Metals ($LZM), which utilizes proprietary Hydromet Technology to manufacture lower-carbon metals (2.11%). The fund has climbed 82.8% over the past year, charges 64 basis points, and attracts solid volume of 0.71 million shares.

SPDR S&P Kensho Clean Power ETF (CNRG)

Managing $215.3 million in assets, CNRG offers access to 43 companies driving innovation in solar, wind, geothermal, and hydroelectric power sectors. Major holdings comprise Bloom Energy ($BE) at 4.08% weight, T1 Energy ($TE), an energy solutions provider (3.85%), and Nextpower ($NXT) at 3.35%. CNRG has rallied 67.3% annually, maintains a 45 basis point fee structure, and generates trading volume of 0.01 million shares.

Making Your Decision: Lithium ETFs and Beyond

The convergence of energy security imperatives, AI-driven electricity demand, and climate policy alignment creates a compelling thesis for lithium and clean energy ETF investment. These vehicles allow you to access the $2.9 trillion investment opportunity unfolding over the coming five years without bearing the risk of individual company selection. Whether you prioritize lithium-intensive battery manufacturers like Albemarle and Lithium Argentina, or prefer broader clean energy exposure, the ETF options above provide multiple pathways to benefit from this transformational global trend.

The energy transition investment landscape has fundamentally shifted from a concentrated, policy-dependent phenomenon into a diversified, multi-regional structural movement. Lithium ETFs and comprehensive clean energy funds serve as efficient vehicles for capturing this shift.