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Fuel Switching Opportunities in Canadian Industrial Sectors

Executive Summary

1.1 Introduction

Canada is moving towards meeting its objective of a 30% reduction in greenhouse gas (GHG) emissions from 2005 levels by 2030. The Government of Canada’s Clean Fuel Standard is expected to include fuels used in the industrial sector. One option for reducing lifecycle GHG emissions from the fuels used in this sector is switching to lower carbon fuels (LCF), such as natural gas, renewable natural gas, biofuels, biomass and other options. This study examines the potential of switching to LCFs, associated costs and savings as well as the readiness of LCFs to be deployed in nine industrial sectors.

In 2015, the nine industrial sectors included in the scope of this analysis contributed close to 248 million tonnes of GHG emissions in Canada. This represented about 34% of Canada’s total GHG emissions of 722 million tonnes.Footnote 1 Approximately 158 million tonnes or 64% of the total GHGs from the nine sectors are from fossil fuels, including some fuels that are used as feedstocks, which could be reduced from use of LCFs. Examples of these situations include: natural gas for production of ammonia, methanol, and natural gas-based production of carbon black in the chemicals industry; carbon anodes in the aluminum industry; and coal used to make metallurgical coke as well as coke itself in the iron and steel industry. In these and other cases, the carbon is ultimately oxidized to form carbon dioxide (CO2), also providing some useful energy. The remaining emissions can be referred to as process emissions, which for the purposes of this analysis includes emissions that are generated from use of non-methane (i.e., non-natural gasFootnote 2) feedstocks that cannot reasonably be lowered with LCFs. Process emissions include: carbon dioxide (CO2) from calcination of carbonates (e.g., such as limestone); perfluorocarbons (PFC) from aluminum production; coke build-up on refinery catalysts that is burned off to regenerate the catalyst; combustion of petrochemical, refinery and bitumen upgrader fuel gases or off-gases that originate from feedstocks; and fugitive and venting emissions – mostly in the upstream oil and gas industry.

The table on the following page provides estimates of the total GHG emissions from “substitutable” fossil fuels in the nine sectors of interest that were examined for LCF substitution in the study. Close to 86% of the substitutable fuel is natural gas. Petroleum coke, coal, metallurgical coke, heavy fuel oil, diesel and other fossil fuels each makes up less than 5% of the “substitutable” fuels. (See Tables 4 and 5 in section 1.3)

Table 1: GHG Emissions for Sectors
(million tonnes - CO2e, 2015
Sectors of Interest GHGs From
Fossil Fuels
% of GHGs From Substitutable
Fossil Fuels
Process GHGs
Emissions, Including
Carbon in Feedstocks
Upstream oil and gas 92.7 59% 64.6 157.3
Chemicals 21.8 14% 3.2 25.0
Iron and steel 12.3 8% 0.5 12.8
Mining (including coal) 8.6 5% 0.7 9.3
Forest products 6.6 4% 0.1 6.7
Aluminum 5.7 4% 1.0 6.7
Petroleum refining 4.1 3% 13.1 17.2
Cement 4.2 3% 6.5 10.7
Base metals 1.8 1% 0.1 1.9
Total sectors of interest 157.8 100% 89.8 247.6
% of Total GHG emissions 64%   36% 100%

Sources: Environment and Climate Change Canada, Facility-Reported Greenhouse Gas Data.
Upstream oil and gas excludes natural gas transmission sector.
Environment and Climate Change Canada (2017) National Inventory Report 1990–2015
Some estimates are derived using data from Canadian Industrial Energy End-Use Data and Analysis Centre (CIEEDAC).
Cheminfo Services estimates for “GHGs From Substitutable Fossil Fuels” includes some fuels that are used as feedstocks, which can be substituted with lower carbon fuels. Also includes small amounts of emissions from propane and other fuels not examined in the study.

1.1.1 Assumptions

This analysis had a broad scope in that it encompasses nine complex industrial sectors. There are many gaps in the landscape of data available for fuel types uses, GHG emissions and fuel prices. A number of assumptions were applied to develop GHG emission reductions and costs of LCFs relevant to each sector, for each fuel type used, in each province/territory where the sector facilities are located. Key context and assumptions are tabled below. The Introduction (section 2) provides more details regarding assumptions and the information sources used.

Table 2: Context and Key Study Assumptions
Key Assumptions Rationale / Comments
Carbon levies are added to reference fuel prices.
Results are shown for $0, $20, $30, and $50 per tonne-CO2e carbon levyFootnote 3.
The Government of Canada has announced that liquid fossil fuels (e.g., heavy fuel oil, diesel fuel, propane, gasoline), gaseous fuels (e.g., natural gas) and solid fuels (e.g., coal and coke) will be subject to a levy. Carbon levy rates will initially be set for the period from 2018 to 2022. Rates for each fuel subject to the levy will be set such that they are equivalent to $10 per tonne of CO2e in 2018 and increase by $10 per tonne annually to $50 per tonne in 2022.Footnote 4
Reference year for annual GHG emissions, fuel use, and prices was 2015 2015 was the most recent year for which most fuel use and GHG emissions data were available.
All LCFs are available and delivered to facilities in a quality that can be used as “drop-in” replacements for up to 10% of the substitutable fuels used at the LCF prices assumed. Availability of LCF fuels and their feedstocks (e.g., renewable natural gas from biomass, municipal solid wastes) is uncertain for all provinces/territories and regions in Canada and could not be analyzed in the scope of this study.
(Natural Resources Canada is conducting a separate study focused on the availability of LCFs and their feedstocks in Canada.)
The LCF substitution rate was kept at 10% for each substitutable fuel in all sectors and provinces/territories. The research found that for most LCF alternatives, a low level of substitution (i.e., ~10%) is usually technically feasible (exceptions and caveats have been identified). Examples are: cleaned renewable natural gas (i.e., methane) could be used as an alternative to natural gas; wood biomass could be used as an alternative to coal or petroleum coke in some sectors.
Results developed (e.g., total cost of LCF) using 10% substitution can be easily scaled up or down.
No capital costs for fuel switching are required at user facilities for the 10% substitution level assumed.
Only annual fuel costs (or savings) are calculated.
The assumption that no capital costs are incurred at fuel user facilities to accommodate LCF is reasonable in most cases – for a 10% LCF substitution rate for the drop-in fuels selected. Amortized capital costs over 15-20 years for fuel user facilities are likely to be relatively low in comparison to additional annual fuel costs in most, but not all cases. Site specific analysis, which could not be carried out given lack of facility data, is suggested in further work to test the reasonableness of this assumption.
No new natural gas or other fuel pipelines installed. If natural gas is not available in a province or region, then natural gas as a LCF would not offer substitution potential.
Renewable natural gas (RNG) facilities could be constructed at facilities or at sites where it could be injected into the natural gas pipeline delivery system. The RNG would meet natural gas specification requirements. This assumes that sufficient renewable raw materials are available or could be harvested (e.g., forest biomass/wood) to support the RNG facility(s).
The heat contents and emission factors applied were the same for most fuels for all sectors and regions across Canada. For the same type of fuel, heat contents and emission factors can vary by supplier/user, sector and province. Most of the variations contribute a relatively small portion to the overall uncertainties associated with the results presented in this analysis.

Fuel heating values (i.e., higher heating value - HHV), emission factors and fuel prices for fossil fuels and LCFs, were key inputs to develop estimates of: the amounts of LCF energy needed to substitute for the reference year (2015) use of fossil fuels; GHG emission reductions for LCF substitution; and to develop the costs of LCFs (including cost-effectiveness in $/tonne-CO2e-reduced). Data was gathered for reference year prices for fuels for each province/territory. The 2015 fuel prices were available in various units, which were all converted to $ per gigajoule ($/GJ) using average HHV values. Prices (or full cost in economic terms) for delivery to users were assumed for renewable natural gas and biochar at 15 $/GJ/. These prices inherently include the capital costs, returns to capital, feedstock and all other costs, including costs of transportation to users.

The 10, 20, 30, 40 and 50 $/tonne-CO2e carbon levies are shown in $/gigajoule. Carbon levies, expressed as $/GJ/, which are different for each fuel, were added to the reference year prices.

The study was primarily concerned with identifying opportunities for LCFs and developing cost estimates or savings for LCF adoption. The working definition of “opportunity” for this study is potential adoption of LCFs by the industries that provide an economic incentive to reduce fuel costs versus the base case. The base case in this study includes the added costs of carbon levies or the penalties for emitting GHGs associated with use of substitutable fossil fuels (as well as the carbon levy costs for LCF alternatives - which are lower). Without these carbon levies (e.g., see results in body of report for carbon levy at zero (0) $/tonne-CO2e), there are practically no economic opportunities for industry to use LCFs since LCF prices are higher that fossil fuel prices. This reflects industry’s interest to use energy/fuels that minimize their costs. The study provides results that show opportunities with increasing carbon levies.

The set of reference year (2015) prices without carbon levies, with carbon levies, by province/territory (along with their source or assumption base), HHV values, and emission factors are documented in the Introduction (section 2). Reference year prices without carbon levies for each the provinces/territories are provided in the following table. Sector fuel use estimates, by type of fuel were developed for each province/territory since fuel prices vary by province/territory. For example, the natural gas price is different in Alberta than in Ontario.

Table 3: Fuel Price Assumptions, by Province, and Carbon Levy
($ per gigajoule)
Province/Territory Natural Gas
Heavy Fuel Oil
Middle Distillates/Diesel
Coke - Refinery
Petroleum Coke - Upgrader
Coal Coke
Biomass Wood
Renewable Natural Gas
Used Tires
Renewable diesel/biodiesel
2015 Prices - Excluding Carbon Levy
Ontario $5.07 $15.80 $17.49 $1.49   $1.12 $6.39 $5.56 $15.00 $15.00 $4.16 $33.48
Quebec $6.34 $11.36 $17.93 $4.28   $1.12 $6.31 $5.56 $15.00 $15.00 $4.16 $28.62
British Columbia $3.05 $9.87 $17.64 $4.33   $1.96 $4.23 $5.56 $15.00 $15.00 $4.16 $31.40
Alberta $2.14 $8.92 $16.80 $2.43 ($0.16) $1.39   $5.56 $15.00 $15.00 $4.16 $28.87
Manitoba $4.34 $9.87 $16.59 $2.43   $1.96   $5.56 $15.00 $15.00 $4.16 $30.98
Saskatchewan $3.08 $9.92 $16.07 $2.43   $2.07   $5.56 $15.00 $15.00 $4.16 $32.43
New Brunswick $4.73 $10.52 $16.71 $2.53   $3.54   $5.56 $15.00 $15.00 $4.16 $34.62
Nova Scotia $3.23 $5.51 $16.60 $2.53   $2.45   $5.56 $15.00 $15.00 $4.16 $34.62
Newfoundland   $9.94 $17.93 $3.16   $2.45 $2.45 $5.56 $15.00 $15.00 $4.16 $34.62
Prince Edward Island   $9.16 $16.94                 $29.06
Average Canada $4.00 $10.09 $17.07 $7.71 ($0.16) $2.01 $4.84 $5.56 $15.00 $15.00 $4.16 $32.43
Carbon Levy ($/GJ/)
Cost of Carbon Levy at 10 $/tonne-CO2e $0.49 $0.75 $0.73 $0.83 $0.97 $0.91 $1.10 $0.02 $0.01 $0.0003 $0.64 $0.001
Cost of Carbon Levy at 20 $/tonne-CO2e $0.99 $1.50 $1.46 $1.66 $1.94 $1.82 $2.21 $0.04 $0.02 $0.001 $1.28 $0.001
Cost of Carbon Levy at 30 $/tonne-CO2e $1.48 $2.24 $2.19 $2.49 $2.91 $2.73 $3.31 $0.06 $0.03 $0.001 $1.91 $0.002
Cost of Carbon Levy at 40 $/tonne-CO2e $1.97 $2.99 $2.92 $3.32 $3.89 $3.64 $4.41 $0.08 $0.04 $0.001 $2.55 $0.002
Cost of Carbon Levy at 50 $/tonne-CO2e $2.47 $3.74 $3.65 $4.14 $4.86 $4.55 $5.52 $0.10 $0.05 $0.002 $3.19 $0.003

1.2 Presentation and Discussion of Results

A separate section is provided for each of the sectors of interest. For each section, tables are provided that show the estimates of fuel use for each fuel type, by province/territory. These tables were used to develop fuel-specific GHG emissions, by province/territory to which province-specific fuel pricing was applied. The fuel use in units of energy (terajoules) were used to develop cost estimates.

For the cost estimates developed, each fuel in each sector was substituted for a total of 10% in energy terms (e.g., terajoules) (not volume or mass-tonnes of fuel). If more than one LCF was used in place of a higher carbon fuel, then the 10% reduction in fuel use (not GHG emissions) was split equally. For example, if biomass, natural gas, renewable natural gas and used tires are substituted for coal in a sector in each province, the four LCFs equally substitute at 2.5% (on an energy basis – i.e., terajoules) in that sector and province. If there are three LCF substitutes for a fuel, each LCF would substitute for 3.33% of the fuel.

To estimate annual costs of each LCF option, 10% of the fuel use in the sector in each province is multiplied by the difference in the price of the LCF fuel (which is typically higher) and the price of the higher carbon fuel in use. The annual costs can be divided by the annual reduction in GHG emissions to estimate cost-effectiveness - i.e., $/tonne-CO2e reduced. The costs were estimated in context of different carbon levies. Estimated fuel use, GHG emission reductions, annual fuel costs and cost-effectiveness results are provided for each sector and province/territory. An illustrative example of the calculations is provided in the Introduction (section 2).

The costs presented for each sector are not intended to represent “true” marginal cost curves for each sector or province, since there are potential alternatives or complementary technologies and actions that facilities might be able to adopt to reduce fossil fuel use and lower their GHG emissions. For example, facilities might invest in technologies to reduce fuel use and increase energy efficiency (at lower costs than using LCF), so that their total annual fuel use and costs for 10% substitution may be less than that indicated. The costs presented are at the sector level for each province/territory – the inherent assumption being that the LCFs identified can be adopted among the population of fossil fuel-using devices without any or significant capital and other costs, beyond paying for the LCF at the delivered prices used for this study. All GHG reducing options (including energy efficiency improvement options) should be evaluated and such options must be independent of each other to avoid improper cost curve construction.

While the costs presented are not “true” marginal cost curves, the LCF options and their costs are developed independently of each other – without affecting each other and without double counting of costs or GHG reductions achieved. As such, there is analytical value in ranking the costs in order of increasing cost-effectiveness ($/tonne-CO2e reduced) to identify the more attractive LCF options and opportunities where it may be economical to adopt LCFs (or alternatively have higher carbon levy payments). It should be noted that the higher the carbon levy, the lower the cost to adopt LCFs. This is because the fuel price plus the carbon levy increasingly approaches the price of the LCF (plus the LCF’s lower costs of the carbon levyFootnote 5). Where cost estimates are shown greater than zero, payment of carbon levy would be economically preferable to using the LCF indicated. When the costs are shown less than zero, the costs of using LCFs is more attractive than using fossil fuels – this being the definition of an “opportunity” for industrial fuel users for the purposes of this study.

Ranked costs are shown for all sectors analyzed for all of Canada and for each of the provinces/territories in the Appendix.

1.2.1 Discussion of Technical Issues

Technical factors are discussed where there is substantial uncertainty associated with adoption of LCFs. Examples of important technical factors regarding substitution of LCFs that are discussed in the report include: biomass use as a substitute for coal in coke-making in the iron and steel sector; biochar use as a substitute for coke in iron and steel sector blast furnaces; and biochar (charcoal) as a substitute for petroleum coke use in production of aluminum carbon anodes.

A key assumption in this study is that renewable natural gas (RNG) would be available in a quality that is suitable as a substitute for natural gas. This means that it would be largely composed of methane and have a comparable energy content (i.e., gigajoules per cubic metre) to that of natural gas. The related assumption is that such RNG could be produced and provided either for injection into the natural gas distribution pipeline system or piped to industrial facilities from on-site or nearby RNG facilities at a price of 15 $/gigajoule. This price or full cost would include the costs of capital (amortized), return to capital, and all other costs for delivering the RNG. Under these conditions, RNG would be a “drop-in” substitute, so that the industrial user does not need to incur additional capital or other costs. As a result, technical factors that facilities may need to address to accommodate RNG as a replacement for natural gas are not discussed in the report. At the low substitution levels assumed, and considering many (but not all) of the facilities in practically all sectors use natural gas, substitution with RNG is assumed to involve few if any technical issues. The analysis does not examine raw material, technical issues or capital costs associated with making or delivering RNG to users.Footnote 6 Where natural gas pipelines are not present, natural gas as a LCF alternative was not analyzed.

Similar assumptions are made for renewable diesel/biodiesel as a substitute for diesel and heavy fuel oil. In this analysis, renewable diesel (RD) and biodiesel (BD) are not distinguished as LCFs. For simplicity, the inherent assumptions are that either RD or BD could be used at the substitution level assumed (e.g., 10%) and that they would be available at the average price assumed for each province/territory. Renewable diesel is often preferred (versus biodiesel) as a drop-in replacement for diesel. Biodiesel tends to be used more in the summer months to alleviate concerns regarding flow.Footnote 7

The results of this study have a moderate level of uncertainty, and as such should be used only by Natural Resources Canada for a better understanding and as a point of reference of the potential order of magnitude of the costs involved in adopting LCF to the levels shown. The main sources of uncertainty associated with the cost results presented in this study are: uncertainty in the price of fuels; uncertainty in the quantities of each fuel used by the sector in each province/territory; and uncertainty regarding the assumption that capital costs are zero for the level of LCF substitution assumed. Without comprehensive publicly available data and substantial additional industrial facility data (which could not reasonably be gathered, given the methodologies that could be applied in the scope and resources available for this study), rough estimates were made based on historical fuel use, GHG emissions, and the consultant’s judgment.

1.3 Fuel Types Used in Sectors, by Province/Territory

The table on the following page provides estimates of the total fuel use by province/territory for all of the nine industrial sectors analyzed. There are data gaps in the landscape of publicly available (i.e., from Statistics Canada) provincial/territory-specific data for the sectors, largely due to reasons of confidentiality. Therefore, many of the estimates were developed using the available data, GHG emissions by sector and province, and application of reasonable assumptions. The fuels in the shaded columns in the following table were not considered for substitution in this study. The rest of the fuels were considered for LCF substitution.

Table 4: Estimated Total Fuels Used in Sectors, by Province/Territory
(petajoules, or thousands of terajoules)
Heavy Fuel Oil
Coal Coke,
Coke Oven Gas
Refinery Fuel Gases,
Ontario 215.1 6.9 11.1 24.1 13.2 86.4   2.8 37.5 40.1 0.5 47.5 485.2
Quebec 143.4 9.5 4.6 3.6 13.5   41.6 1.3 33.1 42.4 0.5 51.3 344.7
British Columbia 152.4 2.6 17.3 4.3 8.2   1.8 1.0 5.9 69.4 0.5 45.1 308.3
Alberta 1,681.0 3.2 54.2 39.4 3.5     0.9 264.3 39.5 0.8 19.5 2,106.3
Manitoba 28.9 1.3 6.1 0.1           2.9 0.9 2.6 43.0
Saskatchewan 259.6 0.1 1.3 10.6 0.0       12.8 3.9 0.2 1.9 290.4
New Brunswick 16.7 3.7 0.7 8.9 0.0       27.2 21.5 0.3 6.9 86.0
Nova Scotia 4.9 0.2 0.9 0.3 0.4     0.1 0.0 3.4 0.1 3.9 14.1
Newfoundland   11.8 9.0 2.7 0.0 10.3     10.0   0.1 0.6 44.4
Prince Edward Island   0.0 0.0   0.0           0.0 0.1 0.2
Yukon Territory   0.0 4.1   0.0           0.5 0.0 4.7
Northwest Territory 4.4 0.1 16.3               2.6 0.0 23.4
Total Fuel Use 2506.3 39.5 125.4 94.0 38.9 96.7 43.4 6.2 390.8 223.1 7.1 179.4 3,751.7

Numbers shown as 0.0 are greater than zero, but round to 0.0.

  1. Includes energy from oxidation of carbon anodes in aluminum production and combustion of pitch in anode baking process.

Shaded fuels are not considered for substitution in this study.

The quantity of LCF energy required for a 10% substitution of the fossil fuel carbon sources examined in the study is provided in the table below. This table excludes spent liquor at pulp and paper mills, and biomass. It also excludes fuels that were not amenable to LCF substitution, namely: petroleum refinery fuel gases, coke on catalysts regenerated at petroleum refineries, and bitumen upgrader off-gases. The low quantities of propane are also excluded.

Table 5: Estimated Fuel Use Subject to 10% Substitution, By Province/Territory
(petajoules, or thousands of terajoules)
Region Natural
Heavy Fuel Oil
Coal Coke,
Coke Oven Gas
Ontario 21.5 0.7 1.1 0.9 1.3 8.6   0.3 34.4
Quebec 14.3 1.0 0.5 0.4 1.4   4.2 0.1 21.7
British Columbia 15.2 0.3 1.7 0.3 0.8   0.2 0.1 18.6
Alberta 168.1 0.3 5.4 3.2 0.4     0.1 177.5
Manitoba 2.9 0.1 0.6 0.0         3.6
Saskatchewan 26.0 0.0 0.1   0.0       26.1
New Brunswick 1.7 0.4 0.1 0.2 0.0       2.3
Nova Scotia 0.5 0.0 0.1 0.0 0.0     0.0 0.7
Newfoundland   1.2 0.9   0.0 1.0     3.1
All other* 0.4 0.0 2.0   0.0       2.5
Total Fuel Use 250.6 3.9 12.5 4.9 3.9 9.7 4.3 0.6 290.7
% of Total 86.2% 1.3% 4.3% 1.7% 1.3% 3.3% 1.5% 0.2% 100.0%

Numbers shown as 0.0 are greater than zero, but round to 0.0. Totals may not add due to rounding.
*Prince Edward Island, Yukon, Northwest Territories and Nunavut.

Provincial/territorial fuel use estimates for each sector are provided in the body of the report.

1.4 Summary of Costs for Lower Carbon Fuels

The table below summarizes total fuel use in the nine sectors, GHG reductions associated with 10% LCF substitution, the annual fuel costs and average cost-effectiveness for the sector. A total of 15,297 kilotonnes of GHG reductions would result from the use of LCFs at this substitution level.

Table 6: Summary of GHG Reductions and Costs for Lower Carbon Fuels, by Sector
Sector Total Fossil Fuel Used
Percent LCF Substitution Assumption LCF Fuel Required
GHG Emissions from Fossil Fuel
GHG Reductions with LCF
Reduction as % of Total GHG Sector Fuel Emissions Reduction as % of Total Fuel GHG Emissions Fuel Costs with $50 Levy
Average Cost-effectiveness with $50 Levy
Cumulative GHG Reductions With $50 Carbon Levy
Cement 52,561 10% 5,255 421 261 6.07% 0.15% $9 $36 261
Iron and Steel 168,385 10% 16,758 1,240 1,231 9.65% 0.70% $71 $58 1,492
Aluminum 58,525 10% 5,852 451 447 7.83% 0.26% $43 $97 1,939
Mining 124,386 10% 11,943 834 826 9.58% 0.47% $113 $137 3,547
Base Metals 29,510 10% 2,920 180 154 7.92% 0.09% $24 $154 2,720
Forest Products 116,956 10% 11,696 628 627 9.50% 0.36% $102 $162 2,566
Chemicals 439,865 10% 43,971 2,174 2,173 8.69% 1.24% $389 $179 5,719
Upstream Oil & Gas 1,839,465 10% 183,947 9,280 9,171 8.64% 5.24% $1,842 $201 14,890
Petroleum Refining 78,196 10% 7,773 408 407 2.36% 0.23% $68 $167 15,297
Totals 2,907,849 10% 290,115 15,615 15,297 8.74% 8.74% $2,661 $174  

Source Cheminfo Services estimates.

This analysis identified a relatively small number of opportunities where there are fuel savings relative to paying a carbon levy of $50 per tonne-CO2e. The cumulative total sum of these GHG emission reductions was 693 kilotonnes, as shown on the bottom-line in the table that follows. It should be noted that these estimates are based only on a 10% substitution rate for LCF for each fuel in each sector and province/territory. A higher substitution rate for these opportunity areas would result in higher GHG emission reductions. For example, if natural gas replaced all the petroleum coke use at some cement plants and bitumen upgraders (where the costs seem more attractive than the 50 $/tonne-CO2e carbon levy), there would be greater GHG reductions than the assumed 10% substitution level. All costs for all LCF options analyzed are provided in each province and for each sector in the Appendix.

Table 7: Summary of GHG Reductions and Opportunities (Savings) for Lower Carbon Fuels
(With Carbon Levy at 50 $/tonne-CO2e)
Sector Province Lower Carbon Fuel Option GHG Reductions with LCF
Fuel Costs with $50 Levy
Cost-effectiveness with $50 Levy
Cumulative GHG Reduction
Base Metals British Columbia Natural gas for petroleum coke 0.4 ($0.03) ($88) 0.4
Cement British Columbia Natural gas for petroleum coke 2.8 ($0.24) ($88) 3
Cement British Columbia Used tires for petroleum coke 1.6 ($0.09) ($59) 5
Cement Alberta Natural gas for petroleum coke 2.6 ($0.15) ($59) 7
Cement Quebec Used tires for petroleum coke 2.1 ($0.12) ($56) 9
Cement Alberta Natural gas for other fuels Footnote 8* 1.2 ($0.06) ($52) 11
Cement Nova Scotia Natural gas for other fuels* 0.1 ($0.01) ($51) 11
Cement British Columbia Natural gas for other fuels* 1.3 ($0.05) ($39) 12
Base Metals British Columbia Biomass for petroleum coke 0.9 ($0.03) ($35) 13
Cement British Columbia Biomass for petroleum coke 6.7 ($0.23) ($35) 20
Base Metals Quebec Biomass for petroleum coke 0.4 ($0.01) ($34) 20
Cement Quebec Biomass for petroleum coke 9.1 ($0.31) ($34) 29
Cement Alberta Natural gas for coal 4.5 ($0.14) ($32) 34
Cement Nova Scotia Natural gas for coal 0.5 ($0.02) ($31) 34
Base Metals British Columbia Natural gas for coal 2.6 ($0.08) ($30) 37
Cement Nova Scotia Natural gas for petroleum coke 0.3 ($0.01) ($29) 37
Base Metals New Brunswick Natural gas for coal 0.0 ($0.00) ($26) 37
Cement British Columbia Natural gas for coal 4.9 ($0.12) ($24) 42
Cement Nova Scotia Biomass for other fuels* 0.4 ($0.01) ($18) 42
Cement Nova Scotia Biomass for coal 1.1 ($0.02) ($15) 43
Base Metals New Brunswick Biomass for petroleum coke 3.2 ($0.04) ($13) 47
Cement Nova Scotia Biomass for petroleum coke 0.7 ($0.01) ($13) 47
Base Metals Manitoba Biomass for petroleum coke 0.4 ($0.00) ($11) 48
Cement Alberta Biomass for petroleum coke 6.2 ($0.07) ($11) 54
Cement British Columbia Biomass for other fuels* 4.4 ($0.04) ($10) 58
Cement British Columbia Biomass for coal 10.4 ($0.10) ($10) 69
Base Metals British Columbia Biomass for coal 6.8 ($0.06) ($9) 75
Cement Alberta Biomass for other fuels 3.3 ($0.01) ($4) 79
Cement Alberta Biomass for coal 9.6 ($0.03) ($3) 88
Upstream Oil and Gas Alberta Natural gas for petroleum coke at upgraders 141.1 ($0.27) ($2) 230
Mining Quebec - Iron ore mining Renewable natural gas for heavy fuel oil 15.5 ($0.02) ($1) 245
Cement Ontario Biomass for other fuels* 10.2 ($0.00) ($0) 255
Cement Quebec Biomass for other fuels* 4.8 ($0.00) ($0) 260
Cement Ontario Biomass for coal 29.8 ($0.00) ($0) 290
Cement Quebec Biomass for coal 14.1 ($0.00) ($0) 304
Iron and Steel Ontario Biomass for coke 388.7 ($0.04) ($0) 693

Negative annual costs are annual savings. Rounding results in some numbers being shown as zero.
* “Other Fuels” in the cement sector include solid and/or liquids wastes, and miscellaneous fuels not elsewhere accounted for – See Cement section.

A summation of the GHG reductions and costs by province/territory is provided in the table that follows. The total and average costs shown are heavily influenced by the sectors in the province/territory, and the differentials between higher carbon fuels and lower carbon fuels. For example, the price of natural gas in Ontario is higher than in Alberta, so that the price difference (and cost) between the LCF alternative (i.e., RNG) and natural gas is lower in Ontario. There are some lower cost-effectiveness LCF options in provinces where sectors are using solid carbon energy sources, such as coal and petroleum coke. These include, but are not limited to: cement plants in Ontario and Quebec; and integrated iron and steel mills in Ontario. In these cases, biomass or other renewable sources of carbon provide large GHG reductions versus the solid fossil fuels, which are emissions intensive.

Table 8: Summary of GHG Reductions and Costs for Lower Carbon Fuels, by Province
Province LCF Fuel Required for 10% Substitution
GHG Emissions from Fossil Fuel Being Substituted with LCF
GHG Reductions Achieved with 10% LCF Substitution
Fuel Costs with $50 Levy
Cost-effectiveness with $50 Levy
Ontario 33,601 2,135 2,047 $194 $95
Quebec 22,955 1,429 1,387 $143 $103
Newfoundland and Labrador 1,557 134 131 $16 $120
New Brunswick 2,230 126 121 $19 $156
Manitoba 3,058 155 155 $26 $170
British Columbia 18,374 1,004 961 $167 $173
Nova Scotia 611 34 31 $5 $174
Saskatchewan 26,022 1,286 1,285 $247 $192
Alberta 177,068 8,988 8,855 $1,795 $203
Prince Edward Island 0.2 0.01 0.01 $0.004 $291
All other metal mining (Canada Average) 4,638 323 322 $50 $154
Totals and Averages 290,115 15,615 15,297 $2,661 $174

Full report available upon request. Please contact  Low Carbon and Alternative Fuels at

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