UBS says $140 trillion will pour into clean energy — and picks the global stocks to cash in

Published Tue, Mar 30 20212:39 AM EDTUpdated Tue, Mar 30 20219:11 AM EDT

UBS has estimated that around $140 trillion of investment will be spent on decarbonizing the world's energy supply by 2050 and named a number of stocks set to benefit. 2050 is the year many countries have set as a deadline to become carbon neutral, in order to meet targets set out in the Paris Climate Agreement . Clean energy currently makes up 15% of the total consumed globally, but UBS said this needed to top 55% for the world to achieve net-zero emissions. In a note published Thursday, the analysts said that while the predicted energy transition might be a "once-in-a-generation" investment opportunity, there were "countless" ways to play the theme. The following 10 stocks were among UBS's top picks: Airbus — UBS likes the European aerospace company because of its plans to develop a hydrogen-based plane, due to be produced by 2035. The analysts said the company will benefit from zero-carbon technologies as plane replacement cycles shorten, supporting new plane demand . Volkswagen — The German automaker was one of UBS's picks in the auto sector because it has the "world's most aggressive EV (electric vehicle) transition story with higher EV investment than any other carmaker." UBS analysts therefore saw a "substantial re-rating opportunity." Volkswagen CEO Herbert Diess told CNBC earlier this month that VW wants to " get close and then overtake " electric carmaker Tesla. General Motors — American carmaker GM was listed as another buy-rated auto stock by UBS. Analysts said it was the most aggressive in the electric vehicle space of the big three original equipment manufacturers (OEM) in Detroit, which includes Fiat Chrysler and Ford. Hyundai — The South Korean automaker is the Asian OEM with the most ambitious electric vehicle strategy, according to UBS analysts. There were reports that Hyundai Motor and Kia Motors were in talks with Apple to develop an autonomous electric vehicle, but the carmakers quashed those rumors last month. Alstom — UBS analysts expect France-based transport manufacturer Alstom to benefit from the fact that rail transport is set to be zero emissions by 2035-40. It has already built trains using hydrogen fuel-cells . Vestas – The Danish firm is the leading wind turbine manufacturer and is set to benefit from a transition to renewables, UBS said. Last month, Vestas announced plans to produce a 15-megawatt offshore wind turbine , with the aim of installing a prototype next year. Air Liquide – UBS analysts anticipate that French industrial gas supplier Air Liquide will be one of the leaders in green hydrogen. It has partnered with Siemens Energy to scale up the production of electrolyzers to produce green hydrogen . Electrolysis is the process which splits water into oxygen and hydrogen. Linde – Chemicals company Linde, which is headquartered in both Ireland and England, is the largest industrial gas producer in the world. UBS said hydrogen currently represents around 6% of Linde's group sales but its management expects that to double that by 2030. Subsea 7 – UBS said the engineering firm has a competitive edge, given that it started its offshore wind installation business more than a decade ago. Enel – Italian energy company Enel is a "very compelling medium-term 'buy and hold'" stock, according to UBS analysts. "Compounding alone should deliver 40-50% total return over the next three years, with around 85% of the earnings regulated or contracted in some way, and a dividend that is 'guaranteed' for the next three years by management," they said.

Vokswagen Tarok concept pickup

Handout/Volkswagen Group of America, Inc.

UBS has estimated that around $140 trillion of investment will be spent on decarbonizing the world's energy supply by 2050 and named a number of stocks set to benefit.

2050 is the year many countries have set as a deadline to become carbon neutral, in order to meet targets set out in the Paris Climate Agreement.

Clean energy currently makes up 15% of the total consumed globally, but UBS said this needed to top 55% for the world to achieve net-zero emissions. In a note published Thursday, the analysts said that while the predicted energy transition might be a "once-in-a-generation" investment opportunity, there were "countless" ways to play the theme.

The following 10 stocks were among UBS's top picks: