Canada’s cleantech export edge: Scaling innovation in a shifting world

The clean technology industry is at a crossroads. Global uncertainty is reshaping the trade landscape, and the retreat of climate ambitions is pivoting momentum away from the global energy transition. At the same time, global carbon dioxide emissions hit record highs in 2024, and the planet crossed the 1.5°C global mean warming threshold for the first time. These two competing realities—geopolitical disruption and climate urgency—have paved diverging paths for the cleantech industry.

So, what does the future hold for Canadian cleantech? Export Development Canada’s (EDC) newly released 2025 cleantech report explores this question in depth, identifying scalable technologies and Canada’s export strengths in a shifting global market.

Why global clean energy investment is booming

Clean energy investment surged to US$2 trillion in 2024—double that of fossil fuels. Manufacturing costs are falling, and technological breakthroughs are accelerating deployment. In some regions, installing certain clean technologies is now cheaper than fossil fuel systems. Solar power, for example, is 41% cheaper and wind 53% cheaper to install than the lowest-cost fossil fuel alternative.

Once connected, clean energy systems are also relatively cheap to maintain, with each new unit installed effectively decreasing the cost of future units. The energy transition is no longer just about averting global warming—it’s also about good economics and sound business practices. Climate-related opportunities continue to drive investor behaviour, especially as the AI-led acceleration in data centres increases energy demand. Commercially scalable clean technologies are expected to push through despite challenging regulatory, financing and political environments.

Scalable cleantech: Where Canadian innovation is winning

Geopolitical factors and economic uncertainty are influencing investor sentiment across the cleantech sector. Investor interest is likely to focus on commercially viable technologies, while higher-cost new technologies may encounter difficulties scaling effectively. The EDC cleantech report entitled Canada’s cleantech future: Scalable, profitable, essential, highlights three sectors that are commercially viable, resilient and investment-ready:

• renewable energy
• electric vehicles (EVs)
• electrification

These sectors accounted for 90% of total global energy transition investment in 2024. Their economic potential extends beyond deployment, offering opportunities across the manufacturing value chain and enabling regional export growth. 

Canada’s renewable energy export advantage

In 2024, renewable energy projects attracted record investments, driven by rising demand in new and emerging markets. While tariffs and geopolitical frictions pose challenges for supply chains, Canadian capabilities in renewable energy remain strong. Canada ranks among the top global producers of hydroelectricity and has significant potential to meet domestic electricity needs with wind and solar.

Canada’s clean electricity exports—comprising nuclear and renewable sources—have grown steadily since 2019, with a compound annual growth rate of 7.3% from 2013 to 2023. EDC’s comparative advantage analysis identifies export opportunities in solar, hydro, wind, biofuels, recycling and waste management across markets such as the United Kingdom, Germany, France, Australia, Japan and South Korea. 

Canada’s EV battery supply chain: A global growth engine

Electric vehicles (EVs) are the most effective way to decarbonize transport emissions. In 2024, more than 20% of new cars sold globally were electric, with China and other developing markets emerging as key demand centres. While revised mandates and targets have dampened short-term momentum, the long-term outlook remains strong. The International Energy Agency (IEA) projects that electric cars will make up more than 40% of all car sales by 2030.

Canada’s growing automotive and battery manufacturing pipeline positions the country to play a key role in the global EV supply chain. With substantial mineral deposits and a strong environmental, social and governance (ESG) track record, Canada is well-placed to support the next wave of EV growth. 

Electrification technologies: Canada’s hidden export strengths

Electrification is the cornerstone of global decarbonization efforts. It offers the most effective way to reduce emissions in industrial and energy-intensive sectors. Revenue opportunities span grid and transmission infrastructure, as well as heating and cooling innovations.

Canada has a robust ecosystem of companies enhancing grid integration and pioneering energy storage. Innovative companies in heat pumps, smart heating, ventilating and air-conditioning (HVAC) technologies and electric arc furnaces are helping to scale electrification solutions globally.

Canada’s cleantech outlook: Resilient, profitable, global

The energy transition is alive and evolving. Falling costs, economic viability and commercial scale are driving mainstream adoption. Despite global headwinds, certain technologies are expected to remain resilient.

For Canada, the outlook is promising. From solar and wind exports to critical minerals and niche electrification technologies, cleantech offers substantial commercial and trade opportunities. While the near-term may appear uncertain, the long-term trajectory for Canadian cleantech is bright.

Acknowledgements

This week, a very special thanks to Prerna Sharma, senior economist in EDC’s economics department.

As always, at EDC Economics, we value your feedback. If you have ideas for topics that you’d like us to explore, please email us at economics@edc.ca and we’ll do our best to cover them.