Fossil fuel companies could waste up to $2.2 trillion on unnecessary projects in the next decade amid global efforts to combat climate change and transition to renewable energy sources, analysts said in a report released Wednesday.

Large energy companies are ignoring advances in clean technologies — including solar, battery storage and electric cars — that could thwart their longtime business models, the report by London-based think tank Carbon Tracker said. Many of these companies assume that the demand for coal, oil and natural gas will continue to grow in the coming decades, so they continue investing in such processes, the report added.

“Too few energy companies recognize that they will need to reduce supply of their carbon-intensive products to avoid pushing us beyond the internationally-recognized carbon budget,” James Leaton, co-author of the report, said in a news release.

The report, titled “The $2 Trillion Stranded Assets Danger Zone: How Fossil Fuel Firms Risk Destroying Investor Returns,” was based on an analysis that compared a businesses-as-usual scenario with one that limits warming of the planet by the end of this century to 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels. World leaders negotiating at United Nations climate conferences have agreed that carbon emissions must be phased out to avoid a global temperature rise above 2 C by 2100 — a scenario scientists believe would help limit the worst effects of global warming. Vulnerable areas of the world have already witnessed severe flooding, drought and unpredictable storms.

With this target in mind and renewable energy sources becoming increasingly competitive in terms of cost, the report argued that no new coal projects are necessary. Demand for oil should peak around 2020, and growth in gas is likely to disappoint industry expectations, the report said.

Scientists have said that most of the world’s remaining fossil fuel reserves must be left in the ground to keep the global temperature rise under 2 C. Burning all of the world's reserves would likely melt much of Antarctica’s ice cover and thus raise sea levels significantly, a recent report found.

Expecting continued growth in fossil fuel demand would also likely lead to financial loss — which could affect investors, the report said.

“If the industry misreads future demand by underestimating technology and policy advances, this can lead to an excess of supply and strand assets,” the report said. “This is where shareholders should be concerned — if companies are committing to future production which may never generate the returns expected.”

The United States has the most to lose, with $412 billion invested in unnecessary fossil fuel projects that risk becoming stranded assets, the report said. In the energy sector, stranded assets refer to “those investments which are made but which, at some time prior to the end of their economic life, are no longer able to earn an economic return, as a result of changes in the market and regulatory environment,” according to the International Energy Agency.

Canada sits behind the U.S. with $220 billion invested in unnecessary fossil fuel projects, according to the report, followed by China at $179 billion, Russia at $147 billion and Australia at $103 billion.

“Business history is littered with examples of incumbents who fail to see the transition coming,” Anthony Hobley, CEO of Carbon Tracker, said in a statement. “Fossil fuel incumbents seem intent on wasting capital trying to hold onto growth by doing what they have always done rather than embracing the energy transition and preserving value by adopting an ex-growth strategy.”