Digging into emissions from the mining industry

The mining industry can cut its emissions by electrifying and finding efficiencies— but that will take time, especially at remote mines.

This the second Insight in our series on heavy industry.

How can an industry take from the ground without adding to the atmosphere? That is just one of the challenges facing the mining industry as it plans its transition to net zero.

Canada’s mines can be examined from many angles. Among other things, mines produce essential inputs for clean technologies, generate jobs and revenue, and pose a host of environmental and social challenges. Today’s Insight explores only one dimension of the Canadian mining industry: where its emissions come from and how they can be reduced.

So far, more mining has meant more emissions

According to the definition in Canada’s national emissions inventory, mining refers to the extraction of all metal and mineral products except for fossil fuels. It encompasses more than 100 facilities that mine dozens of materials at sites on and under the ground across the country.

Mining is one of the seven sub-sectors of heavy industry, and it is the only one whose emissions have risen since 2005. Overall, mining emissions rose three megatonnes, or 36 per cent, between 2005 and 2022.

It is possible to explain this increase by looking at three key drivers of emissions: economic activity, energy intensity, and emissions intensity.

Figure 1 breaks down the impact of these drivers on the mining industry. Clicking on the historical button in the figure, mining emissions are higher largely because mining operations are more energy intensive, per unit of GDP, than they were in 2005.

One reason for this trend may be that there are now fewer accessible, high-quality ores, so mining operations are increasingly extending deeper underground, into more remote areas, or both. The deeper or more remote the mine, the more energy it expends.

A second driver of mining emissions is economic activity. The mining industry has grown since 2005, putting upward pressure on emissions.

On the bright side, Figure 1 also shows that the mining industry has reduced its emissions intensity per unit of energy, mostly by switching to less carbon-intensive fuels. Between 2005 and 2022, mines reduced their consumption of coal and petcoke by 52 per cent, and cut heavy fuel oil use by 43 per cent.

However, mines largely replaced these products with other fossil fuels. Between 2005 and 2022, the mining industry nearly tripled its gas consumption. Two fossil fuels, diesel and gas, accounted for 59 per cent of the energy used in the mining industry in 2022.

Meanwhile, though mines now use more electricity in absolute terms, electricity represents a smaller share of their energy mix, dropping from 37 per cent in 2005 to 33 per cent in 2022. That share needs to increase significantly for the mining industry to decarbonize.

Most mining emissions have electric solutions

Like much of Canada’s economy, a net-zero mining industry will run largely on electricity.

Mines generate most of their emissions by combusting fossil fuels to power equipment and to heat and cool the mine’s site, materials, and workers. All these emissions have electric solutions. Mines can eliminate most of their equipment and transportation emissions with electric drills, haulers, personnel carriers, and more, and meet most of their temperature control needs with industrial heat pumps.

The switch to electricity offers valuable co-benefits. By replacing equipment that runs on fuels like diesel, electric equipment will significantly reduce the amount of ventilation needed at mines, protecting workers’ health and cutting operating costs at the same time.

The expected impact of these changes is visible in the projected drivers tab of Figure 1. Under the climate policies in Canada’s 2030 Emissions Reduction Plan, emissions intensity and efficiency improvements will drive nearly three megatonnes of emissions reductions in the mining industry in 2030. Electrification contributes to both drivers, since it cuts the emissions intensity of fuels and reduces total energy needs.

This transition to electrified mining is already underway. Canada’s first all-electric mining operation opened in 2019, and several other mines have since transitioned off fossil fuels.

It is possible to fully decarbonize mining, but it will take time

Though the solutions to mining emissions are within sight, there are some hurdles in their way.

Like other sectors that plan to electrify, the mining industry needs a bigger, cleaner, and smarter electricity grid. A case study of one Australian mine found that electrification could reduce its energy needs by up to 49 per cent, but would require between two and three times more electricity. On top of the extra generation they require, new mines, and potentially existing ones, will need new or expanded transmission and distribution systems. It will take time to construct that infrastructure, especially if it is to be built in a way that respects Indigenous rights and title, and ecologically sensitive areas.

For Canada’s dozen or so off-grid mines, electrification is even more challenging. Not only is it harder to connect these mines to the grid; renewables also work less well in the northern regions where most remote mines are located. These facilities will likely need a mix of solutions to decarbonize, including renewables, storage, and potentially biofuels, geothermal or even small modular reactors.

Mining companies’ exposure to fluctuating commodity prices can make them cautious about undertaking large new capital investments. So while electrification can offer cost savings in the long-term, the mining industry may in some cases need targeted support to absorb the upfront costs. Developing the infrastructure necessary to support their electrification will also take time. As Figure 2 illustrates, a net-zero-compliant mining industry is likely to accelerate its emissions reductions in the mid-2030s to early 2040s.

Mining can embody clean growth while driving it

Three categories of policy can keep the mining sector moving along its net zero pathway.

The first is industrial carbon pricing. Mining is a classic example of an industry with high emissions intensity and high exposure to international trade. Canada’s carbon pricing systems have been designed to incentivize these industries to decarbonize while protecting them from competitors in jurisdictions with weaker climate policy.

Governments also play an important role supporting innovation in the mining industry, by funding related industrial research and development, conducting original research, and supporting the development of industry standards that reward high environmental performance.

Finally, governments can continue to support mining electrification and efficiency in targeted ways. For example, government programming has helped deploy renewables at Northern mines, and mines are among the industries that can apply for public funds for energy audits.

Canada is uniquely positioned to be a global leader in low-carbon mining. Investors and buyers are increasingly scrutinizing operational emissions, so the country cannot focus simply on extracting minerals and materials. Leadership requires that Canada’s mines not only contribute to clean growth, but that they model it.

Ross Linden-Fraser is a Senior Research Associate at the Canadian Climate Institute.

How can Canada cut emissions from heavy industry?

This is the first in our new Insight series on heavy industry. In the coming months, 440 Megatonnes will release a series of Insights on how heavy industry can chart a course to net zero: where policy can help, and how Canada can turn industrial transformation into a competitive advantage.

The heavy industry sector is diverse, hard to decarbonize, and expected to be a key driver of a net-zero economy.

Heavy industry produces many of the essential materials needed for a net-zero economy, from the steel of a wind turbine to the minerals of an EV battery. But the processes used to make those products are often energy- and emissions-intensive.

Canada’s heavy industry sector is in fact several of the country’s largest industries grouped together, excluding oil and gas. It is usually divided into seven sub-sectors: mining; smelting and refining of non-ferrous metals (like nickel or aluminum); pulp and paper; iron and steel; cement; lime and gypsum; and chemicals and fertilizers. Altogether, they accounted for 11 per cent of Canada’s emissions in 2022, generated from a combination of fossil fuel use and chemical processes.

As Canada chases its emissions reduction goals, each one of these sub-sectors will need to chart its own pathway to net zero.

The challenge and the promise

According to the International Energy Agency, there are four reasons that heavy industry may be slow to decarbonize. First, it will need to rely more heavily on nascent technologies like carbon capture or hydrogen. Second, in the short term, decarbonized production processes will be more expensive. Third, many industrial products face international competition, so higher costs are harder to pass along to customers. Fourth, because industrial facilities are long-lived and capital-intensive, they face a higher risk of locking-in emissions.

These challenges have shaped Canada’s approach to industrial climate policies. For instance, carbon pricing for large emitters is designed to shield industries from high-carbon, low-cost competitors while maintaining an incentive to cut emissions.

If Canada’s heavy industry can be successfully decarbonized, it will generate dividends for the country’s competitiveness as well as the world’s climate. Low-carbon critical minerals, aluminum, and steel are just a few of the products that are in growing demand as the world decarbonizes. And other countries are introducing policies that will privilege the lowest-carbon producers. Canadian industries that can cut their emissions will be better placed to seize those opportunities.

Those opportunities are also critically important for the nearly 300,000 people who are employed in Canada’s heavy industries, and for the regions where industrial facilities are concentrated, whether it’s mining in the North, aluminum in Quebec, or chemicals and fertilizers on the Prairies.

Various—sometimes competing—trends shape emissions from heavy industry

Every sector of Canada’s economy contains enormous diversity. Within heavy industry, multiple and sometimes contradictory trends are influencing emissions.

The overall trend in the sector looks positive. Between 2005 and 2022, emissions fell by about 13 megatonnes (Mt), or 15 per cent. Six of seven sub-sectors also saw declining emissions in that time (Figure 1).

But there are other trends that complicate this positive first impression. First, in the mining sector—one of the largest sub-sectors, and one with strong potential for future economic growth—emissions are growing. They have risen 3 Mt since 2005.

Second, in some cases, emissions are lower because sub-sectors are shrinking, not because they are more efficient.

Emissions are the product of three main drivers: economic activity; energy intensity; and emissions intensity.

Some sub-sectors in heavy industry have lower emissions because they have reduced the energy or emissions intensity of their operations. The chemicals and fertilizers sub-sector is one such example. But in the pulp and paper sector, for example, lower emissions are strongly correlated with reduced output (Figure 2).

Canada’s official emissions reporting conveys the same message. The latest National Inventory Report suggests that the strongest trend influencing emissions from heavy industry is “the continued evolution of Canadian production towards other sectors and services.”

Figure 2 offers one way to compare these trends. It illustrates how the GDP, energy intensity, and emissions intensity of each sub-sector have changed since 2005. Future insights will explore these drivers in greater detail.

Every industry has its own pathway to 2030

Canada’s path to its climate goals is really the sum of many individual paths followed by sectors across the country. While heavy industries may share some common features and challenges, each sub-sector has different drivers of emissions, and will need its own combination of solutions to reach net zero.

In the coming months, 440 Megatonnes will explore those drivers and solutions in greater detail. While heavy industry may not be Canada’s largest-emitting sector, it is one of the largest challenges. Its emissions are hard to reduce, and though decarbonization is in its long-term interests, it will face costs in the short term. Policymakers can play a crucial role in helping to steer the sector toward long-term competitiveness.

Ross Linden-Fraser is a Senior Research Associate at the Canadian Climate Institute.

Calculating emissions intensity across the economy

New data show the most emissions-intensive sectors in Canada across Scope 1, 2, and 3 emissions.

At 440 Megatonnes, we’ve been tracking Canada’s climate progress through our Canadian Emissions Intensity Database, which helps businesses, governments and households estimate their emissions footprint.

Since we launched in November 2022, new data have become available.

The database provides emissions intensities for all the scope emissions in more than 60 economic sectors and 51 final demand expenditure categories and exports. This includes emissions from direct combustion (Scope 1), purchases of electricity and heat (Scope 2), and across supply chains (Scope 3 upstream).

Newly available data includes the federal government’s official National Inventory Report for 2021 greenhouse gas emissions. In addition, we’ve updated economic data points based on GDP from Statistics Canada for that year.

With new data in hand, we can compare progress across sectors and categories. And we can provide a more up-to-date tool for those using the database.

Canada’s top emissions-intensive sectors

Here we’ve broken down the top five most emissions intensive sectors in 2021 and how they compare to the previous year’s data.

In 2021, animal production and aquaculture was the most emissions intensive sector, followed by water, sewage and other systems, iron and steel mills and ferro-alloy manufacturing, and so forth.

In most cases, emissions for each sector were dominated by Scope 1 emissions—with the obvious exception being the petroleum and coal manufacturing sector. Some sectors saw greater year-on-year declines in emissions intensity, including petroleum and coal manufacturing, animal production and aquaculture, and iron and steel mills and ferro-alloy manufacturing.

Caveats to consider about emissions intensity

A couple points are worth mentioning before diving further into the data.

First, we’re considering the emissions intensities of each sector, which is different from total emissions. The data shows which sectors, pound for pound, emit the most greenhouse gases per unit of economic value, as expressed by GDP output.

This can be useful, not only to estimate an organization’s Scope 3 emissions footprint, if it isn't otherwise calculated from supply chain data. But it’s also useful to get a sense of the potential trade-offs when reducing emissions in different sectors through policy. Those sectors with high emissions intensity generate the smallest amount of economic wealth (GDP) per tonne of carbon emissions, and vice versa.

The second point is that our denominator—GDP, in this case—can change year to year based on whether commodity prices or profit margins change. That means a change in emissions intensity expressed in this way may not reflect an actual improvement in greenhouse gases emitted per unit of physical production—of tonnes of steel or barrels of oil, for example.

Physical units for emissions intensity are always a better measure to understand a sector’s progress to decarbonization, but this data can be difficult to come by. That said, tracking emissions by GDP is still a useful way to estimate emissions intensity and can provide a single metric against which all economic sectors can be compared against.

A deeper dive into the data

With that in mind, consider the steep declines in emissions intensity for petroleum and coal manufacturing in 2021, at nearly 25 per cent.

At first glance that seems like a good news story for climate progress. However, the bulk of that drop was driven by a decline in GDP that year (-32 per cent), and only modest declines in total emissions (-2 per cent).

Similarly, animal production and aquaculture saw a 15 per cent decline in emissions intensity, driven largely by a drop in GDP (-18 per cent), not a change in emissions.

It's also useful to consider the scale of these sectors relative to one another. Figure 2 shows the size of each sector in terms of GDP on the x-axis and the size of total Scope 1, 2 and 3 emissions on the y-axis. The total emission intensities are indicated by the bubble sizes.

You can see the rank order of each sector changes when considering total emissions and GDP contributions. Petroleum and coal manufacturing are far ahead of the pack on both metrics, but place fourth on emissions intensity. Likewise, water, sewage and other systems have the second highest emission intensity, but are the smallest of all sectors when it comes to total emissions and GDP. Animal production and aquaculture, the most emissions-intensive sector of the five, is still near the top when it comes to total greenhouse gas emissions and GDP contributions.

Decreasing emission intensity with clean tech

Each of these sectors have potential solutions to reduce emissions intensity in line with a net zero world.

Wastewater treatment plants can capture biogas and repurpose it to replace fossil fuels. The cement sector is piloting a number of ways to cut emissions, including through new applications of carbon capture and storage (see here, here, here and here). Clinker substitution with renewable resources is another potential route. And government and the steel industry have made big investments in emissions-cutting technologies that will move away from coal-based blast furnaces.

Most of the emissions from animal production and aquaculture come from methane released through the digestive process of livestock and manure management. Substituting and adjusting livestock feed can reduce these emissions–for example, by moving from corn to barley, adding seaweed or other food additives, or switching to high-quality forages like alfalfa.

While the primary goal of the emissions intensity database is to help estimate emission footprints, it can also provide new perspectives on progress across all sectors of Canada’s economy on the road to net zero.

Seton Stiebert is an advisor to 440 Megatonnes and the Principal of Stiebert Consulting.

Concrete ways to reduce emissions from the cement sector

Decarbonizing the cement sector is a challenge that will require a big effort and innovation from both industry and government.

It’s hard to picture a world without concrete—it’s the foundation for most of our urban and transport infrastructure. From buildings to bridges to sidewalks, concrete is all around us. But producing it currently comes with hefty emissions. As our analysis shows, the sector is not on a pathway in line with Canada’s 2030 emissions target (Figure 1).

While the terms are often used interchangeably, cement and concrete are not the same thing. Cement is actually an ingredient in concrete, along with sand, gravel, and water. But it’s the production of cement’s primary ingredient, clinker, made from intensely heated and ground limestone, that creates the bulk of greenhouse gas emissions in concrete production (This is why it’s usually the cement sector that’s the focus of emissions reduction efforts). Typically, 40 per cent of direct greenhouse gas emissions comes from the combustion of fuels like coal and petroleum coke, natural gas, and waste tires to convert limestone to clinker, the main component that gives concrete its structure—the remaining 60 per cent comes from the chemical reactions involved in that conversion.

Figure 1: Current and announced policies aren’t enough to get the cement sector on a net zero pathway

Total greenhouse gas emissions for cement, legislated, developing and announced. A gap of 3.2 Mt is projected to get on the track of the net zero pathway.

Breaking up is hard to do

Decoupling production from greenhouse gas emissions will be more difficult in the cement sector than in other industrial sectors due to the high share of emissions from the process of making Portland limestone cement—the most common type of cement. While there are options that could fully decarbonize the sector on the path to net zero by 2050 (like carbon capture), there are other options that can be implemented quickly to reduce emissions this decade; see the Roadmap to Net-Zero Carbon Concrete by 2050 for a detailed look at the opportunities.

A lot of fuel is needed to create intense heat in the cement kiln to change limestone into cement. As in all industries, producers in the cement sector need to minimize costs and therefore use the cheapest fuels available to generate heat—including coal, petroleum coke, natural gas, and waste tires. These fuels are good from a cost perspective, but not great when it comes to greenhouse gas emissions.

Increasingly biofuels are seen as an option to decarbonize a variety of sectors. However, heating cement kilns might not be the best use of biofuels, given their limited feedstocks and potentially more effective use in other sectors, like transportation. A better option to decarbonize cement production might be to introduce efficiency improvements that reduce the amount of clinker included in cement and, in turn, reduce the amount of emissions-generating fuel required for heating.

Binding materials other than clinker can be partially added to cement without significantly changing the physical properties of the final product. By-products from other industries have already been used to replace clinker, including fly ash from coal power generation and blast furnace slag from iron and steel manufacturing. While using these materials has been a win-win for industries that would have had to dispose of the waste anyways, both coal electricity generation and the use of blast furnaces in steel making are expected to decline in Canada, especially on the path to a net zero economy. One alternative is the replacement of some of the clinker currently used in cement with volcanic ash, calcined clay, and possibly increased ground limestone, which could cut emissions associated with the avoided clinker production. Not only can the product mix of cement be changed to reduce emissions, but carbon dioxide can also be injected into concrete to effectively sequester it, further reducing emissions. These efficiency improvements can be implemented quickly and drive significant decreases in some of the hardest-to-abate greenhouse gas emissions from cement production. As our analysis of Canada’s Emissions Reduction Plan shows, efficiency and other improvements to reduce the amount of energy per tonne of cement can continue over the next decade (Figure 2).

Figure 2: Efficiency improvements only offset expected growth from cement production emissions

Efficiency and other improvements to reduce the amount of energy per tonne of cement can continue over the next decade.

But efficiency improvements only offset the increase in emissions expected from growth of the industry. For the deeper emissions reductions required to put the cement sector on a net zero pathway, it will need to capture the remaining greenhouse gas emissions being released from fuels and the clinker production process. Investing in carbon capture, utilisation, and storage (CCUS) can be an effective method for the cement industry to decarbonize beyond the efficiency measures above. But CCUS plants need to be rapidly installed to achieve broad implementation by 2030. The industry, both domestically and globally, needs to quickly move beyond feasibility studies to real-world testing at the production kiln scale. Canada can be a leader with this technology but only with experience and innovation.

WE BUILT THIS CITY

As the 440 Megatonnes Policy Tracker shows, there are many government policies that could go beyond energy efficiency to support CCUS implementation in the cement sector. The federal government is developing a Carbon Management Strategy and has put forward an Investment Tax Credit for CCUS covering 50 per cent of upfront installation costs (although clarity is needed to ensure carbon capture applied to cement kilns will be an approved use). Provincial governments have implemented or proposed policies on low-carbon fuels, funding carbon capture, and promoting energy efficiency that can all apply to cement production.

More broadly, the cement sector is covered either directly by a rising carbon tax or by some form of an Output-Based Pricing System. Both provide an incentive for production facilities to reduce their emissions.

On the demand side, governments need to ensure regulations and standards are in place to enable greater use of low-carbon cement in concrete applications. Ramping up testing of alternative cement mixes to ensure appropriate product performance and then updating building codes, with a focus on performance rather than rigid specifications, is a key measure to help reduce emissions. The federal government has committed to updating its model building codes and provincial governments should follow suit. Product testing and code development is an ideal area for cooperation between government, industry, and building trades. Governments can take this one step further and proactively buy low-carbon building materials for their projects.

Both the public and private sectors will need to make innovation a priority in how Canadian firms use and produce cement. The good news is that many of the enabling policies are already in place. Now governments and industry need to move quickly and leverage them to put the cement sector on a low-carbon pathway to 2030.

Brad Griffin is a 440 Megatonnes Advisor and the Executive Director of Simon Fraser University’s Canadian Energy and Emissions Data Centre.