Over the last decade, Canada’s low-carbon exports have more than doubled in value, as the global energy transition has accelerated.

What’s new?

From critical minerals to electric motors, Canada’s diverse basket of low-carbon exports is outpacing the growth of all other exports. Since 2013, Canada’s low-carbon exports have more than doubled in value, growing from $15.8 billion to $38.7 billion last year. That’s nearly twice the growth rate of all other exports combined and shows the potential for future opportunities in a global economy increasingly moving to net zero.    

This week’s Insight looks at the performance of low-carbon exports in Canada by tracking national export revenue over the past decade in hopes of getting a better picture of where the country is at and the potential road ahead. 

Tracking the progress of clean exports is important in gauging the readiness and competitiveness of Canada’s economy in the midst of this low-carbon transition. The export data shows that Canada has a lot to offer countries in the midst of this accelerating shift to clean energy. 

Clean exports have grown nearly twice as fast as other exports

To track the progress of Canada’s clean-energy exports, 440 Megatonnes revisited the list of low-carbon export products from an earlier piece in Policy Options. This list contains a total of 141 individual low-carbon commodities, providing a wide net measure to track Canada’s ability to compete in the global low-carbon economy. 

Figure 1 highlights the performance of low-carbon commodities over a ten-year timeframe between 2013 to 2023, in current Canadian dollars. The low-carbon products are further broken down into six categories, each representing a different subset of products that are important in a low-carbon economy, ranging from clean energy to the critical minerals used in the manufacture of clean technologies. 

At an aggregate level, these low-carbon exports have grown by an annual average of 9.4 per cent over the past ten years, starting at $15.8 billion in 2013, and growing to $38.7 billion in 2023. 

This is almost double the average growth rate of all exports in Canada, which grew an average of 5 per cent per year. The growth in clean energy exports also outpaced oil and gas exports — which saw an average annual growth rate of 4.3 per cent. 

As a share of total exports, low carbon commodities grew from just 2.8 per cent in 2013 to 4.5 percent last year, while oil and gas exports fell from 24 to 23 per cent.  

Clean export growth is strong across sub-sectors

Figure 2 represents the annual growth rate of each of the six aggregated low-carbon categories compared to all exports between 2013 to 2023. Almost all of the categories outperformed the growth rate of all exported products in Canada.

Clean transport exports are scorching hot. This category saw the largest increase in annual growth over the past ten years, at 27.5 per cent. This group includes electric and hybrid heavy-duty and light-duty vehicles, as well as electric trains and electric forklifts. The boom in clean technology-related exports is driven by significant increases in electric vehicle demand. Exports in clean transportation were around $771 million in 2013 and have grown by more than 11 times their original value to around $8.8 billion last year. This trend is accelerating, with the value of clean transportation exports doubling between 2022 and 2023.

Clean fuels grew the second fastest at an annual average of 10.1 per cent. This includes products such as alternative fuels and biofuels like ethanol and biodiesel, as well as biomass, which typically includes products like wood pellets. Exported goods within this category more than doubled over the span of the past ten years, from $1.4 billion in 2013 now growing to $3.6 billion in 2023. 

The growth of clean liquid fuels has notably accelerated in recent years. In 2013, biomass accounted for 65 per cent of clean fuel exports. Fast-forward to 2023 and clean liquid fuels have grown to account for roughly the same share of export value as biomass. 

Rounding out the top three, was energy efficiency exports, which includes thermostats, LED bulbs, heat pumps for buildings, and high-efficiency electrical equipment. This category grew to a total of $6 billion in 2023, up from $2.6 billion in 2013. 

There were a number of other notable data trends. The clean electricity and power equipment category outpaced the growth rate of total exports. This category is the largest by value of all the low-carbon subsectors, reaching $12.8 billion in 2023. Despite its significant size, the subsector maintained an impressively high annual growth rate at 7 per cent. Also of note: while this category includes renewable technologies and their components, non-fossil fuel-based generators, batteries not used in transportation, and more, a quarter of export value comes specifically from electricity exports sold south of the border ($4.3 billion). 

The remaining two categories were clean industry—which includes non-residential heat exchangers, heat treatment systems, steam or vapor generating boilers and electric furnaces—and mined clean energy materials. While the latter category includes critical minerals such as lithium and cobalt, it is largely dominated by uranium exports, which made up 93 per cent of total value. This category grew slower than the rest of the economy’s annual export growth rate, increasing 4.2 per cent on average over the past decade.

More growth opportunities for clean exports as the energy transition quickens 

Low-carbon products have become a bigger part of Canada’s total exports, and increases in the share of low-carbon exports will only rise as global demand continues to rise. Growing these industries can smooth out transition risks for Canada’s economy, as global demand for fossil fuels wanes. Larger low-carbon industries can help to keep Canada more competitive over time.

Notably, the Inflation Reduction Act (IRA) has opened up new trade opportunities for Canadian clean industries with the United States. The IRA makes products made with Canadian electric vehicle components and critical minerals eligible for the law’s tax credits, which should spur the demand for goods flowing across the border.

But an increase in the global demand for low-carbon goods will also mean increased global competition to supply these products as well. As a result, government support—such as expediently finalizing Canada’s clean technology manufacturing and critical minerals investment tax credits—is important for maintaining a competitive business environment in Canada that attracts more low-carbon domestic and foreign investments. 

With the right policy support in place, it's clear from the trade data that Canadian companies selling low-carbon goods are poised for strong growth, as the world continues to transition to a net zero economy.

Arthur Zhang is a research associate for the Canadian Climate Institute, and Dave Sawyer is the Principal Economist at the Canadian Climate Institute.