Portugal: The 4th Most Advanced Country in the World on the Path to Carbon Neutrality

Portugal occupies the 4th worldwide place on the path to carbon neutrality, according to the Allianz Green Transition Tracker 2026, a study by Allianz Research that assesses the progress of 65 economies, responsible for 81% of global greenhouse gas emissions.

The country remains among the top five positions of the global ranking, ahead of economies such as Ireland, Norway, the United Kingdom, Spain and France. However, it slipped one position compared with the previous edition and shows a pace of evolution below the global and European averages.

With a score of 48.7 points, Portugal recorded an improvement of 0.9 points from the previous assessment, below the global average advances of 2 points and 2.2 points in the European Union. The ranking is led by Luxembourg, followed by Denmark and Estonia.

Reduction of emissions and electric mobility drive Portuguese performance

The reduction of greenhouse gas emissions and the growing adoption of electric vehicles are among the main factors explaining Portugal’s standout position.

According to the report, national emissions have fallen by 21.6% since 2015, while electric vehicles accounted for 38% of new car sales in 2025, up from 33% previously recorded.

The relatively low levels of emissions per capita also contribute positively to Portugal’s ranking, both when considering consumption-related emissions and those produced on the national territory.

However, the study identifies signs requiring attention. Although solar energy production rose by 24.9%, the share of low-carbon electricity in the total national electricity production declined from 85.2% to 80.9%.

“Portugal remains among the leaders of the green transition, thanks to the reductions in emissions and the rapid adoption of electric vehicles. However, the recent decrease in the share of low-carbon electricity shows that progress cannot be taken for granted. Expanding clean electricity production while consolidating advances in transport and emission reductions will be essential to maintaining Portugal’s leading position,” says Katharina Utermöehl, head of Theme Research and Policy at Allianz Research.

Europe leads the transition, but the world remains far from climate targets

Despite gains recorded in most of the analyzed countries, the Allianz Green Transition Tracker 2026, titled The clean-tech turning point and why emissions could soon follow, concludes that the transition to a low-emission economy continues to progress at an insufficient pace to meet international climate objectives.

Of the 65 economies assessed, 56 improved their score, but only about one third are advancing at the pace required to meet Paris Agreement-aligned emission reduction trajectories.

Europe continues to lead the process, with European countries occupying the top ten positions in the ranking. Yet, the report warns of a significant slowdown: EU emissions fell by only 0.2% in 2025, after average annual reductions of 4% in previous years.

At the current pace, the European Union would only reach its carbon neutrality goals in 2057.

Globally, projections are even less favorable. According to Allianz Research, carbon neutrality is expected to be reached only in 2064, that is, 14 years after the 2050 target.

Renewables surpass coal for the first time

One of the main conclusions of the study is the ongoing transformation of the global electricity sector. In 2025, renewables overtook coal for the first time in more than a century as the main source of electricity generation, accounting for 33.5% of the world total, versus 33.2% for coal.

Renewables were also responsible for 99% of the net increase in world electricity production, contributing to slowing the growth of global emissions.

The falling costs of clean technologies are accelerating this transformation. Between 2015 and 2025, the installed costs of battery energy storage systems fell by 91%, while the price gap between electric vehicles and internal-combustion engine cars narrowed from 49% to 20% since 2019.

Global investment in clean energy is expected to reach $2.2 trillion in 2026, a 6.5% increase, with particular emphasis on power grids and storage systems.

Global emissions could fall in 2026

Allianz Research anticipates that 2026 could mark a turning point, with global CO₂ emissions from fossil fuels decreasing by about 0.5%, despite global economic growth.

This evolution results largely from the greater competitiveness of clean technologies and the rise in fossil fuel prices, in a context of geopolitical tensions.

However, experts warn that a sustained reduction in emissions will depend on additional investments in power grids, energy storage and predictable climate policies.

“In 2026, CO₂ emissions from fossil fuels could fall for the first time outside a recession context, by about 0.5%. But this is mostly due to cheaper clean technologies and pricier oil than to stronger climate policies,” notes Ludovic Subran, Chief Economist and Head of Investments at Allianz.

The report is released a few days before the start of COP31, the United Nations Climate Change Conference, which runs from November 9 to 20, in Antalya, Turkey, at a moment when meeting international emission-reduction commitments continues to be one of the major global challenges.

Portugal in the global climate transition ranking