Wind turbines in Germany. A new report from tjtktMatthias Schrader/The Associated Press
The global transition to cleaner forms of energy has flatlined, driven by a combination of geopolitical uncertainty, supply and price volatility, and governments shifting their priorities, according to a new report from the World Economic Forum.
The 16th annual Energy Transition Index, released Wednesday, tracked energy systems in 120 countries. By assessing current system performance across metrics including security, sustainability and affordability, as well as transition readiness, the report painted a picture of fragmented and increasingly uneven progress toward transition.
Only 24 per cent of countries improved across their current system performance, the report found. And the conditions that drive future progress, policy, finance, innovation and infrastructure have weakened for the first time in more than a decade.
Canada ranked 32nd in the index, standing out for the reliability, resilience and diversity of its energy system, which combines strong supply security with a balanced and dependable mix of fuels.
However, the index also pointed to the country’s widening sustainability gap and weaker infrastructure performance, raising questions about its ability to sustain long-term competitiveness amid a global shift toward cleaner fuels.
Despite its well-functioning energy system, Canada was among several countries where energy became more expensive – yet it was also among the world’s top 10 energy consumers in 2025, alongside Brazil, China, India, Indonesia, Iran, Japan, South Korea, Saudi Arabia and the United States.
While those countries and Canada outperformed the global average on overall system performance, sustainability “remains the weakest dimension, underscoring how the world’s largest energy consumers still carry the hardest decarbonization burden,” the report found.
The good news is that their readiness to transition to cleaner fuels has strengthened steadily over the past year, sitting well above the global average when it comes to regulations, infrastructure and innovation.
“That matters as electricity demand is expected to keep rising strongly through 2026,” the report said.
“These countries will shape the pace of the global transition because demand growth, electrification and infrastructure needs are increasingly concentrated in large economies.”
Opinion: The world is moving off fossil fuels as Canada continues to live in the past
In all, global energy investment reached a record US$3.3-trillion in 2025. Clean energy attracted roughly twice as much capital as fossil fuels, and renewable electricity capacity increased by nearly 800 gigawatts.
Yet global gains sat alongside grid congestion, permitting delays and chronic underinvestment in emerging economies, which has slowed the energy transition, the report said.
Compounding those challenges were trade restrictions that affected nearly US$2.6-trillion of global commerce, and export controls that covered more than half of critical transition minerals.
Then there is the war in Iran, which has severely disrupted energy flows through the Strait of Hormuz, bringing the supply vulnerabilities of several countries into sharp focus.
Not only did the war trigger one of the most acute energy price shocks since 2022, it forced “import-dependent emerging economies into harder trade-offs between energy access, affordability, and transition investment,” the report said.
At the same time, finance, regulation and innovation weakened simultaneously, pointing to broader erosion in readiness, the report said.
The report recommended three global priorities to get the transition back on track: strengthen energy security, affordability and resilience; unblock delivery by expanding infrastructure; and increase investability through stable policy, credible regulation and better risk-sharing.
“The window to strengthen foundations remains open, but it is narrowing, and the gap between those who act on it and those who do not is already visible in the data.”