Diverging government strategies are reshaping global investment in energy, infrastructure and natural resources as countries balance decarbonization with energy security, affordability and industrial competitiveness, creating a more fragmented landscape for investors, according to a new report from global law firm Baker McKenzie.
Baker McKenzie’s latest report, Competing Energy Strategies: How Government Policy Is Shaping Global Energy, Infrastructure and Natural Resources Investment, examines policy and regulatory developments in over 20 jurisdictions across the Americas, Asia Pacific and EMEA.
The report provides a practical, jurisdiction-by-jurisdiction overview of the policy priorities, incentives and regulatory reforms shaping investment in energy, infrastructure and natural resources, covering supply-chain and critical-minerals strategies, cross-border investment support and controls, domestic participation requirements, and the key opportunities and risks for investors and developers.
Richard Blunt, chair of the Firm’s Global Energy and Infrastructure Group, commented: “Decarbonization remains a powerful driver of investment, but it is only part of the story. Governments are placing greater weight on energy security, affordability and industrial competitiveness, and striking different balances between those priorities. Defense capability is adding a further dimension to those choices. For investors, understanding how these priorities interact is essential to identifying where durable opportunities lie.”
The report finds that some government policies continue to converge, while others are moving in markedly different directions, reshaping how and where capital is deployed.
The extraordinary surge in electricity demand from hyperscale data center development and artificial intelligence infrastructure has made access to reliable power and a deliverable grid connection central to site selection, project valuation and financing. Governments seeking to attract digital investment are increasingly aligning data-center policy with generation, transmission, storage and planning reforms.
Renewable energy continues to attract substantial policy support across most jurisdictions, but there is a material difference in the technologies governments are backing. Some jurisdictions have compressed incentive windows for established technologies such as wind and solar, whilst preserving a substantially longer runway for battery storage, geothermal, hydrogen, carbon capture and advanced manufacturing — a distinction already shaping capital allocation. Others maintain broad support across a wider range of technologies alongside hydrogen, nuclear and sustainable fuels as complementary pillars of their decarbonization and competitiveness agendas.
Grid capacity and connection backlogs are a near-universal constraint. Governments are responding through expansion programs and connection reforms prioritizing viable, construction-ready projects, though implementation and its impact on project timelines remain uneven.
Renewed support for nuclear power reflects a wider, though not uniformly observed, policy trend. Several jurisdictions have repositioned nuclear as central to their energy security and decarbonization agendas, with dedicated funding mechanisms for large-scale projects and Small modular reactors (SMRs). Yet, in many countries it remains a longer-term aspiration, and the route from policy ambition to bankable project is still being built in most markets.
Access to critical minerals and strategic resources has become a matter of national importance, with its strategic rationale broadening beyond decarbonization to encompass digital infrastructure and defense. Countries reliant on imported materials have adopted comprehensive policies to secure supply chains and strengthen domestic processing capacity. Resource-rich countries, by contrast, are seeking investment on terms that secure greater domestic participation in processing, technology transfer and industrial development — an approach reflected in policy measures across multiple jurisdictions.
One of the most visible areas of divergence concerns the future role of hydrocarbons. Some jurisdictions are actively reducing oil and gas production and consumption. Others regard hydrocarbons as essential to economic development, energy security and fiscal stability, and are encouraging continued upstream and midstream investment — many simultaneously pursuing significant renewable energy investment, reflecting a dual-track approach rather than a binary choice.
Richard Blunt added: “Investors need to assess portfolio exposure across diverging regulatory regimes, rather than rely on a single cross-border investment thesis. The strongest opportunities lie where priorities such as energy security, industrial development and decarbonization reinforce one another. Policy ambition alone does not make a project economically viable.”
Read the full report here: Competing Energy Strategies: How Government Policy Is Shaping Global Energy, Infrastructure and Natural Resources Investment
Baker McKenzie is at the forefront of market-leading deals in the energy, mining and infrastructure sector. Its global multidisciplinary team advises developers, investors, financiers, governments and operators on complex cross-border transactions across power, natural resources and infrastructure, from development and financing through to operations and exit.
Baker McKenzie’s latest report, Competing Energy Strategies: How Government Policy Is Shaping Global Energy, Infrastructure and Natural Resources Investment, examines policy and regulatory developments in over 20 jurisdictions across the Americas, Asia Pacific and EMEA.
The report provides a practical, jurisdiction-by-jurisdiction overview of the policy priorities, incentives and regulatory reforms shaping investment in energy, infrastructure and natural resources, covering supply-chain and critical-minerals strategies, cross-border investment support and controls, domestic participation requirements, and the key opportunities and risks for investors and developers.
Richard Blunt, chair of the Firm’s Global Energy and Infrastructure Group, commented: “Decarbonization remains a powerful driver of investment, but it is only part of the story. Governments are placing greater weight on energy security, affordability and industrial competitiveness, and striking different balances between those priorities. Defense capability is adding a further dimension to those choices. For investors, understanding how these priorities interact is essential to identifying where durable opportunities lie.”
The report finds that some government policies continue to converge, while others are moving in markedly different directions, reshaping how and where capital is deployed.
The extraordinary surge in electricity demand from hyperscale data center development and artificial intelligence infrastructure has made access to reliable power and a deliverable grid connection central to site selection, project valuation and financing. Governments seeking to attract digital investment are increasingly aligning data-center policy with generation, transmission, storage and planning reforms.
Renewable energy continues to attract substantial policy support across most jurisdictions, but there is a material difference in the technologies governments are backing. Some jurisdictions have compressed incentive windows for established technologies such as wind and solar, whilst preserving a substantially longer runway for battery storage, geothermal, hydrogen, carbon capture and advanced manufacturing — a distinction already shaping capital allocation. Others maintain broad support across a wider range of technologies alongside hydrogen, nuclear and sustainable fuels as complementary pillars of their decarbonization and competitiveness agendas.
Grid capacity and connection backlogs are a near-universal constraint. Governments are responding through expansion programs and connection reforms prioritizing viable, construction-ready projects, though implementation and its impact on project timelines remain uneven.
Renewed support for nuclear power reflects a wider, though not uniformly observed, policy trend. Several jurisdictions have repositioned nuclear as central to their energy security and decarbonization agendas, with dedicated funding mechanisms for large-scale projects and Small modular reactors (SMRs). Yet, in many countries it remains a longer-term aspiration, and the route from policy ambition to bankable project is still being built in most markets.
Access to critical minerals and strategic resources has become a matter of national importance, with its strategic rationale broadening beyond decarbonization to encompass digital infrastructure and defense. Countries reliant on imported materials have adopted comprehensive policies to secure supply chains and strengthen domestic processing capacity. Resource-rich countries, by contrast, are seeking investment on terms that secure greater domestic participation in processing, technology transfer and industrial development — an approach reflected in policy measures across multiple jurisdictions.
One of the most visible areas of divergence concerns the future role of hydrocarbons. Some jurisdictions are actively reducing oil and gas production and consumption. Others regard hydrocarbons as essential to economic development, energy security and fiscal stability, and are encouraging continued upstream and midstream investment — many simultaneously pursuing significant renewable energy investment, reflecting a dual-track approach rather than a binary choice.
Richard Blunt added: “Investors need to assess portfolio exposure across diverging regulatory regimes, rather than rely on a single cross-border investment thesis. The strongest opportunities lie where priorities such as energy security, industrial development and decarbonization reinforce one another. Policy ambition alone does not make a project economically viable.”
Read the full report here: Competing Energy Strategies: How Government Policy Is Shaping Global Energy, Infrastructure and Natural Resources Investment
Baker McKenzie is at the forefront of market-leading deals in the energy, mining and infrastructure sector. Its global multidisciplinary team advises developers, investors, financiers, governments and operators on complex cross-border transactions across power, natural resources and infrastructure, from development and financing through to operations and exit.
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