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Canada’s Challenge; Mitigating GHG Emissions

Canada’s Challenge; Mitigating GHG Emissions

The Canadian Net-Zero Emissions Accountability Act (NZEAA) enshrines in legislation the Government of Canada’s commitment to achieve net zero greenhouse gas emissions by 2050. The Act establishes the 2030 greenhouse gas emissions target as Canada’s Nationally Determined Contribution (NDC) under the Paris Agreement emissions reduction of 40-45% below 2005 levels by 2030; from 739 million tonnes (Mt) in 2005, to being in the range of 406 to 443 Mt by 2030. The Act also establishes a requirement to set national emissions reduction targets at five year intervals, ten years in advance. Each target will require credible, science-based emissions reduction plans for achieving the targets.

The position of the Canadian Academy of Engineering (CAE) is that it shares the urgency, as stated by the Government of Canada, and by Canadians generally, about the need to achieve major reductions in GHG emissions. The CAE also recognizes that the overall magnitude and complexity of the required infrastructure development program, and associated financing requirements, are unprecedented in Canada. This includes bringing to commercialization several essential technologies which have not been fully proven. In responding to this daunting challenge, there are requirements for securing, quickly, alignment on “optimal” transformation pathways and strategies for meeting both economic and GHG mitigation goals; for securing agreements between governments, industry, First Nations, and other key stakeholders for associated implementation in a very constrained timeframe (now, less than thirty years); and for advancing the enabling institutional capacity for comprehensive planning, policy development, and supportive regulations.

From this, there is a need to respect that there are real risks that the very ambitious targets for 2030 and 2050 cannot be met within the designated timeframes. There is also a need to be realistic about what can be accomplished by mid-century. From this, it follows that the overall program of activities over the next three decades should be based on achieving as much progress as possible for reducing GHG emissions, that these reductions are implemented quickly and cost effectively, and with essential support by Canadians who will all be impacted by increased costs, especially for energy-related services. Through this entire process, there is a need for ensuring continuing economic growth, while transitioning to a low carbon future.

The prime purposes of this document are as follows;

  1. To present areas of priority focus for achieving major early reduction in GHG emissions
  2. To present the fundamental changes which will be essential for achieving the legislated GHG mitigation targets
  3. To present a perspective on likely evolution of Canada’s hydrocarbon sector as it transitions towards becoming GHG emissions free, in response to the NZEAA.
  4. To emphasize the important role of engineers for leadership in scientific assessments of critically important new and emerging technologies for achieving net zero, and for engineering and managing delivery of the largest and most complex infrastructure program in the history of Canada.

This document is focussed on Canada’s GHG mitigation challenge. There are also parallel considerations for addressing the very important challenges of adaptation, especially as the effects of climate change in Canada are already evident, with increasing incidence of extreme climate events. There is a parallel CAE document that focusses specifically on adaptation.

Early Priorities for GHG Mitigation

At present, options for removing CO2 directly from the atmosphere (GHG sinks) are limited. They lack scale and are expensive. The main options include accelerated sequestration of CO2 in the “lands” sector (including forestry and agriculture), bioenergy production with carbon capture and storage (BECCS), direct air capture, and carbonate mineralization. Significant CO2 absorption from the atmosphere will take decades to achieve and is unlikely to contribute substantially to Canada’s net zero commitment, in the 2050 timeframe. The result is that reducing GHG emissions will be the dominant strategy towards reaching net zero by mid-century.

For achieving early major reductions in GHG emissions, immediate national priority should be given to defining pathways, strategies and associated actions, for virtually eliminating the two dominant sources of GHG emissions, which collectively represent 87% of total GHG emissions[1]. These include replacing direct combustion of hydrocarbons (74% of total emissions) with non–GHG emitting supply options, and eliminating, to the maximum extent practical, the direct release of methane (13% of total emissions) to the atmosphere[2].

1 – Eliminating Combustion Emissions from Hydrocarbons

For replacing combustion of hydrocarbons with non-GHG emitting options, it is important to focus on its two end uses; motive energy and thermal energy. Motive energy is derived from burning fossil fuels and using this energy for engines, which, in turn, serve different purposes; transport vehicles, turbines, compressors, pumps, drills, industrial drives, etc. It is important to appreciate that, when burning fossil fuels for motive energy, only 20 to 40% of the primary energy is delivered by engines, due to thermodynamic limitations. The remaining 60 to 80% is converted to heat, which in most cases, is simply discharged to the atmosphere. However, it is possible to capture some of this heat, and use it beneficially, such as adding steam turbines to compressors for combined cycle electricity generation, or for various cogeneration applications.

Thermal energy is based on using the energy, directly from combustion, for various applications. For buildings, these include space heating, hot water and steam production, and cooking.  For industry, thermal energy is also used for various high temperature applications. The distinctive aspect about thermal energy, relative to motive energy, is that there are no thermodynamic losses in the energy conversion process.

The dominant non-emitting supply options for both motive energy and thermal energy include non-GHG emitting electricity supply and non-GHG emitting hydrogen supply.

The most promising option for most motive energy uses is based on conversion to electricity. However, the more promising option for heavy freight and rail transport, at this time, is conversion to hydrogen fuel cells.

The more promising options for providing thermal energy, as already noted, include electricity and hydrogen. For existing buildings which rely on combusting hydrocarbons (dominantly, natural gas) for thermal energy, the option that is currently receiving greatest attention is to replace natural gas boilers, furnaces and stoves with electrical alternatives, including baseboard heaters and heat pumps. However, this is an expensive transition, as existing equipment will need to be replaced, with associated costs, for both equipment removal and replacement, building refurbishment costs, generally higher costs for electricity relative to natural gas per thermal unit, and possible reimbursement for existing natural gas delivery systems that may become “stranded investments” if taken out of service before fulfilling their useful lives.

The option of using 100% hydrogen in existing natural gas delivery infrastructure as a potentially lower cost option is receiving increasing attention in many countries. However, this option still requires detailed scientific and engineering assessment to confirm technical and economic viability. Strategic decisions can then be based on selecting the most favorable transformation option for thermal energy supply for existing buildings.

For new buildings, there is a need to decide between use of electricity and hydrogen, based on cost and social acceptability. In the meantime, however, further expansion of natural gas delivery infrastructure should, in general, be constrained until the potential for 100% hydrogen is demonstrated as a potentially cost competitive, safe and reliable option for thermal energy supply for new buildings.

For high temperature applications in industry, the most promising options, again, are based on relative cost, between electricity, including electric arc furnaces, and hydrogen.

With respect to production of GHG emissions free electricity, the options include hydro, nuclear, wind, solar, thermal (dominantly, natural gas) with CCS, geothermal and storage (pumped storage and batteries) for large scale grid supply, and rooftop solar and district energy for micro-grid supply. With respect to production of GHG emissions free hydrogen, the options are hydrocarbon reforming with CCS, and electrolysis. Over 90% of hydrogen production world-wide, and in Canada, is based on hydrocarbon reforming. Even when including the additional cost of CCS, the current cost of hydrogen production by hydrocarbon reforming, in general, is significantly lower than by electrolysis[3].

2 – Preventing and Eliminating Methane Releases to the Atmosphere

This includes improved prevention and control of methane leakage in natural gas supply and delivery infrastructure (pipelines and distribution lines), process plants, refineries, wellheads, and abandoned wells. It also includes reducing release of methane from waste sites (especially municipal sites) and from the agriculture sector, by both prevention and capture. The dominant strategy is to capture and collect methane, wherever possible, and to use it for beneficial purposes (heating, electricity generation, etc.) or to sequester it. As a last resort, it should be combusted, as the resulting CO2 emissions have a much reduced climate warming impact, relative to methane.

Evolution of Canada’s Hydrocarbon Sector

With the afore-noted changes, and contingent on proven technical and cost competitive viability for hydrogen as a major non-GHG emitting energy supply source, the transformation of Canada’s hydrocarbon sector is projected as follows;

  • Production of hydrocarbon derivatives (liquid fuels) for motive power, such as gasoline and diesel fuel, will reduce substantially, dominantly as a result of major electrification of the transport sector. This will result in reduced refinery output for producing such fuels, with associated repurposing of refinery operations.
  • Natural gas fired generation will remain as a significant option for electricity generation in some jurisdictions, but will require CCS, or (CCUS), for ensuring essentially emissions free electricity production.
  • Based on the promising premise that hydrogen may become the most cost competitive option for providing thermal energy for building and industry, production of hydrogen will be dominated by reforming hydrocarbons. This will also require CCS, or CCUS.
  • Hydrocarbons will remain as the dominant feedstock for production of petrochemicals, such as plastics, polymers, chemicals and pharmaceuticals
  • CCS is a specialized technology, with Canada recognized as one of the global leaders for developing and applying this technology for oil and gas production from refineries, and for electricity generation. This role is enhanced by the enormous resource potential of the Western Sedimentary Basin as one of the worlds’ most geologically favorable land-based regions for CO2 sequestration. Countries around the world will require CCS to meet their respective GHG emissions reduction targets, and should benefit from Canada’s leadership for developing this technology, including integrated collection, transport, use and sequestrations systems.
  • Hydrocarbons will remain as the dominant primary energy supply for most countries, especially for electricity generation and for industrial needs. Export of hydrocarbons should continue to be Canada’s dominant source of export earnings. This will require enhancing export capability, with access to deep water ports, especially from the Pacific coast.
  • In summary, Canada’s hydrocarbon sector should continue being a major domestic supply and export oriented sector of Canada’s economy, even after implementing major transformations towards being GHG emissions free.

Fundamental Changes for meeting Canada’s Declared GHG Reduction Targets

For achieving major transformations for Canada’s energy system to meet both GHG mitigation and economic development goals, the following three sets of activities need to happen.

1 – Delivery of the Largest Infrastructure Program in the History of Canada

The first set of activities includes developing and financing a major infrastructure program, as well as supporting and commercializing several essential transformative technologies.

In a recent global study by McKinsey Global Institute[4], it was stated that “capital spending on physical assets for energy and land-use systems in the net-zero transition between 2021 and 2050 would amount to about U.S. $275 trillion, or $9.2 trillion per year on average, an annual increase of as much as $3.5 trillion from today”. With Canada producing 1.8% of global GDP, a very approximate estimate of corresponding annual capital spending in Canada would be Cdn. $207 billion. It is likely that Canada’s need for capital spending will be higher than the global average, as Canada is well behind most developed economies in reducing GHG emissions. It still has the highest per capita emissions of the G7 Group of countries and is the only G7 country that still has emissions higher than in 1990 (IPCC reference year).

The requirement for major increases in capital spending, for achieving net zero, has been recognized in Canada’s 2022 Budget. The required annual investment has been shown as increasing from the current $15 to $25 billion range to the order of $125 to $140 billion – roughly a six-fold increase. However, as noted above, the need for capital spending to achieve net zero in Canada, will probably be even higher.

As examples of Canada’s enormous capital spending requirements for reaching net zero, Canada needs to increase its electricity supply from its current 150 GW to more than 400 GW[5] by mid-century, while at the same time, transitioning the existing system to low-emissions generation. There is also a need for major rehabilitation of existing supply infrastructure, much of which is old and in need of upgrading or replacement. For the hydrocarbon sector, there are major investments in hydrocarbon reforming, contingent on major shifts towards use of hydrogen, and for developing system wide carbon capture, collection, transportation and sequestration systems. The infrastructure program also includes investments in end use transformations, such as charging stations for both electricity and hydrogen supply, and for conversion of thermal energy supply systems in buildings and industry to use of electricity or hydrogen.

It is important to note that the pathway to net zero will also require investments in several technologies that are generally known, but which have still not been fully proven. Accelerated scientific research, development and commercialization are required for advancing technologies that may become important transformative options in the path towards net zero, and for advancing them through the various developmental stages to full commercialization. Examples include;

  • hydrogen production from both hydrocarbon reforming and electrolysis,
  • hydrogen use for both motive energy and thermal energy,
  • carbon capture technologies for refineries, thermal generation, steel and cement production facilities, pulp and paper mills, and chemical processing facilities,
  • alternative carbon capture processes
  • nuclear technologies for electricity production and thermal energy supply
  • technologies and systems for detection, capture and use of methane, and
  • technologies for production of alternative bioenergy fuels

A special challenge is the consideration of risks associated with advancing such transformative technologies to commercialization and full scale adoption. Earlier major infrastructure programs in Canada were usually based on implementing projects using proven technologies. For the net zero challenge, the infrastructure development program will also include several technologies which are not yet proven, with significant associated technical, financial and scheduling risks. New technologies typically require ten to twenty years from “concept” to “commercialization”, and further lengthy periods for full scale adoption. At the present time, many of the promising technology options have not yet advanced beyond the “concept” stage, with obvious risk implications and uncertainties for selecting the optimal pathway towards net zero. It should also be evident that the potential contribution of such technologies for contributing to the stated 2030 GHG mitigation goal (only eight years) is, at best, very limited.

As a direct result of major reductions in infrastructure development in Canada, especially over the past three decades, much of the very successful Canadian expertise and capability for managing delivery of major infrastructure programs, that existed in the 1950 to 1990 period, has been lost. This capability needs to be rebuilt for ensuring that the massive infrastructure program, for achieving net zero, can again be successfully delivered in compliance with budget, schedule, safety and sustainability requirements.

2 – Establishment of Enabling Planning, Policy and Regulatory Processes and Structures

The second set of activities includes establishing the framework for supporting decision-making processes and structures that will be needed to develop a cost effective and socially acceptable program leading to net zero. This includes ensuring fully integrated planning, as well as a comprehensive policy framework with supporting regulations and incentives.

Comprehensive, fact-based planning is needed to define cost-effective pathways and strategies for achieving major reductions in GHG emissions while contributing to economic growth and for ensuring orderly, cost-efficient transitioning to net zero for Canada. Planning approaches, processes and methodologies need to be consistent with best global practices and expertise.

With respect to developing and applying a comprehensive policy framework for GHG mitigation, developmental work is still required. While carbon pricing is a useful option in the policy “toolkit”, it needs to be supplemented with other policy options, including targeted public sector investments, public-private partnerships, financing support for new and emerging technologies, targeted use of subsidies, incentives, and regulations, and carbon price controls at international borders. The policy framework should be flexible, to ensure that it is being used in the most effective manner, including optimal allocation and use of carbon taxes. Alignment of regulatory policies and regulations with other countries important to Canada, especially the United States and Mexico, is essential, to ensure that Canada’s resource-based and export-oriented economy is being supported.

3 – Approaches for Effective Decision and Execution Processes

The third set of activities is based on having effectively functioning decision-making processes which facilitate coordinated and joint commitments by political and government leaders from federal, provincial and territorial governments, as well as with industry, business, First Nations  and other key stakeholders. There is need for early resolution of major regulatory impediments, such as First Nations land claims. There is also a need for creating a facilitative and cooperative regulatory environment which supports the largest and most complex infrastructure development program in the history of Canada. This essential transformation is especially challenging against the current “backdrop”, where very time consuming approvals, onerous project requirements, and erosion of public support, for major infrastructure developments, have served as major deterrents for such developments. However, if the net zero goal is to be realized, there is real need for fundamental change in regulatory structures and processes, and for strong coordinated leadership for ensuing effective delivery of a massive and very complex transformation program.

The need for public support through the transition to net zero is especially important. The public will continue to demand energy related services which are reliable, safe and affordable. However, the path towards net zero will result in costs which will need to be borne by citizens in terms of increased taxes, and/ or increased costs for energy related services and energy intensive commodities. As noted in the McKinsey Report referenced above, the cost of electricity, in particular, is projected to increase very substantially, as the largest portions of the capital expenditure program will be for electricity infrastructure. At present, the Canadian public is not well informed about net zero pathways and plans, and on financial implications for individual households. There is an obvious requirement for honest dialogue on costs and impacts with the voting public, which are likely to be very challenging. However, if the net zero goal is to be realized, citizens across Canada need to understand and to accept and support costs and impacts for transitioning to net zero.

Important Role of Engineers

As noted above, the role of Canadian engineers will become ever more important, as Canada strives for net zero.  Engineers have traditionally been at the forefront for engineering and delivery of major infrastructure programs, and their role now assumes even greater importance for delivering the largest and most complex infrastructure program in the history of Canada. They have also been at the forefront for developing and commercializing new and emerging technologies, which are now recognized as being absolutely essential for Canada to reach net zero. This includes developing such technologies through the different phases of scientific research, testing, development, demonstration and commercialization. Engineering inputs will also be required for preparation of comprehensive, integrated fact-based plans for transitioning towards net zero in a cost-effective, timely, socially acceptable and fiscally responsible manner.

Prepared by:

Oskar T. Sigvaldason Ph.D., P.Eng., FCAE
Future of Engineering Committee
Canadian Academy of Engineering
April, 2022


[1] National Inventory Report 1990-2019; Greenhouse Gas Sources and Sinks in Canada; Canada’s Submission to United Nations Framework Convention on Climate Change; 2021

[2] The 13% is based on CO2 equivalent global warming potential in 100 years. However, global warming potential for methane in 20 years is more than 3 times higher. This is a major reason why mitigating methane also deserves priority consideration for reducing GHG emissions over the next three decades.

[3] See page 15; cost of hydrogen production; B.C. Hydrogen Strategy; A Sustainable Pathway for B.C.’s Energy Transition; 2021

[4] McKinsey & Company; McKinsey Global Institute; The Net Zero Transition; January, 2022

[5] This is based on results of earlier national studies that have projected electricity supply increasing by 2.5 to more than 3-fold by 2050. See Trottier Energy Futures Project (2016) and United Nations Decarbonization Project (2014)

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