(Bloomberg) -- US clean energy and transport investment jumped 38% last year over 2022. Fueled by President Joe Biden’s signature climate law, investments surged to $239 billion, according to a new report. That includes a major jump in funding for cutting-edge technologies, reflecting a growing interest in the next generation of solutions.

Fourth quarter investments set a record of $67 billion, coming in 40% higher than the same period a year earlier, the report from research firm Rhodium Group found. Far and away the fastest growing sector identified by analysts is emerging climate technologies, such as green hydrogen, sustainable aviation fuel and carbon capture. Investment in these technologies was 10 times greater, hitting $9.1 billion. Nearly half of that came in the fourth quarter. The growth was largely fueled by the US Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), signed in 2021 and 2022 respectively.

The legislation “really transformed the pace of growth entirely, really had a catalytic effect,” said Trevor Houser, a partner in the Rhodium Group energy and climate practice.

Some technologies that are both speculative and critical to reaching net-zero emissions nonetheless now enjoy US-backed mechanisms designed to encourage their deployment. The Department of Energy earlier this month put up to $304 million into four projects that will test carbon capture infrastructure in Kentucky, Mississippi, Texas and Wyoming. The IRA created the first major US clean hydrogen tax credit, and the Treasury Department in December released  draft rules spelling out how the incentive may work.

Whatever their rate of growth, or ultimate success, the laws have sent a signal that these technologies will be key tools the federal government wants to rely on to meet US climate goals.

Read more: Will White, Blue and Green Hydrogen Fuel a Clean-Energy Future, or Fizzle?

These emerging industries attracted more finance than the wind industry did this year, which struggled under high interest rates, siting issues and grid-connection queues. The interest rate environment also put a damper on heat pump sales, as they have residential construction in general. 

Other familiar clean technologies saw an uptick in investments, though. Electric vehicle sales grew 52% and combined with other consumer and business spending, made up almost half the year’s total. In fact, EV sales performed at a rate matching the highest-end predictions that Rhodium and peer institutions jointly made previously, Houser said.

Clean tech now makes up 5% of private US investment in fixed assets and durable consumer goods. A year ago, it was under 4%. It’s finally “a macro-economically significant driver of aggregate investment activity in the US,” Houser said. “And it's an even larger share of investment growth.”

BloombergNEF, which uses a different methodology to track investment across industries and sectors related to the energy transition, counted $303 billion in US investments last year. The world plowed $1.8 trillion into clean technology, an amount still far short of what BNEF projects is needed to get the world on the path to net zero.

The possibility of Republicans gaining control of the White House and Congress could have an impact on spending next year; former President Donald Trump has pledge to roll back Biden’s climate law. But many red-state residents increasingly have a stake in the energy transition, with those states racking up nearly double the investments in renewables and storage of their blue-state counterparts.

“Republicans would be asking members to remove a flow of federal investment into their districts that is already incentivizing the construction of new manufacturing facilities and new electricity generation facilities,” Houser said, “facilities that are creating hundreds of jobs in an individual congressional district.” 

©2024 Bloomberg L.P.