Tracking trends in emissions per unit of production spotlights past successes and future challenges for Canadian industry.
Reducing emissions intensity will benefit Canadian businesses at home and help make them more competitive abroad.
At home, where emissions intensity is an important marker of the broader goal of decarbonization, the federal government’s green procurement policy, commitment to strengthening industrial carbon pricing, and new methane regulations provide advantages to low-carbon production.
Abroad, the European Union implemented its Carbon Border Adjustment Mechanism at the start of this year, meaning exporters with lower emissions intensity—the amount of emissions generated for each physical unit of production—pay lower fees. And other countries may implement similar mechanisms, notably methane product standards on liquefied natural gas.
This Insight looks at emissions intensity trends for eight sectors that together account for almost half of Canada’s total emissions.
Figure 1 shows that since 2005, the intensity of four energy products (conventional oil, bitumen, gas and electricity) has decreased but that of four others (steel, livestock, cement, and landfill services) has barely changed. And the emissions intensity of all products has flatlined in recent years.
Figure 1
Emissions intensity for energy declined, but improvements are slowing
All four energy products show declines in emissions intensities over the last 19 years, but with different stories. Electricity emissions intensity fell dramatically as coal generation was replaced by nuclear, gas, and renewables. Bitumen‘s emissions intensity improved due to production changes, but the improvements are nowhere near enough to offset the surge in barrels produced.
The emissions intensity of conventional oil and gas also dropped steeply. Methane mitigation drove the intensity decreases for natural gas; without it, the intensity of conventional oil would have risen. Federal and provincial methane policies since 2018 have largely succeeded and regulation updates will push more improvements.
After reducing emissions intensities since 2005, progress for energy products flattened in the last few years illustrating our concerns that climate progress is fragile.
Emissions intensity in four other key sectors haven’t changed
The other products in Figure 1 show limited progress through 2024, although in three cases we expect future emission intensity reductions:
- The federal government has invested in low-carbon steel production and a major project coming online will contribute to declining intensities even as other projects are delayed.
- The emissions intensity of landfills declined 5 per cent since 2015 as provinces and municipalities regulated methane capture. New federal regulations will bring additional declines.
- Cement emissions intensity declined slightly by almost eliminating coal use, but major process changes are still needed (strengthened industrial carbon pricing may play a role).
In contrast, we are less optimistic about reducing emissions intensity from livestock, as the historic trend is flat and few new climate policies have been implemented.
Policies are essential for progress, and so is monitoring
Industrial decarbonization is a slow, complex process, making it all the more important to track changes in intensity. This helps governments support Canadian businesses by readily identifying stalled progress, then strategically adjusting policies.
Stay tuned as 440 Megatonnes rolls out a new indicators series that tracks Canada’s progress on important markers of decarbonization.
Alison Bailie is a Senior Research Associate at the Canadian Climate Institute.