EF2023 focuses on the challenge of achieving net-zero greenhouse gas (GHG) emissions by 2050. We explore net-zero scenarios to help Canadians and policy makers see what a net-zero world could look like, visualize the goal, and make informed decisions along the different pathways we explore. Our scenarios cover all energy commodities and all Canadian provinces and territories. We use economic and energy models to do this analysis.
In EF2023, we do scenario analysis to explore uncertainties facing the future of the energy system. The results in EF2023 are not predictions about the future and nor are they policy recommendations. Rather, they are the product of scenarios based on a specific premise and set of assumptions. Relying on just one scenario to understand the energy outlook implies too much certainty about what could happen in the future.
In EF2023 the end point of our analysis is predetermined: net-zero GHG emissions by 2050. We then explore the question, "what might a pathway to that end point look like?" Previous Canada''s Energy Future reports contained scenarios assessing how varying levels of future climate action might affect Canada''s energy future. In those reports, we did not limit the outcome of our scenarios based on a particular goal or target.
In the Global Net-zero Scenario, we assume Canada achieves net-zero emissions by 2050. We also assume the rest of the world reduces emissions enough to limit global warming to 1.5 Celsius (°C). In the Canada Net-zero Scenario, Canada also achieves net-zero emissions by 2050, but the rest of the world moves more slowly to reduce GHG emissions.
The pace of action outside of Canada to reduce GHG emissions is the main difference between the net-zero scenarios in EF2023. As a trading nation, what happens globally affects Canada''s economy and energy system. EF2023 focuses on Canada, and we do not model global energy markets for the scenarios. Instead, international factors relevant to the Canadian energy outlook, such as global prices for crude oil and natural gas, and costs for many low-carbon technologies, are inputs into our models. For some of these inputs, we rely on scenarios from the International Energy Agency''s World Energy Outlook 2022.
The third scenario, the Current Measures Scenario, assumes limited action in Canada to reduce GHG emissions beyond measures in place today and does not require that Canada achieve net-zero emissions. In this scenario we also assume limited future global climate action. FigureES.1 shows the three scenarios.
In addition to the three main scenarios in EF2023, you will find five cases in this report that ask: "What if?". There are many uncertainties on the pathway to net-zero. These cases explore some of them by changing some key assumptions in EF2023 and showing what it could mean for Canada''s pathway to net-zero:
As shown in FigureES.2, electricity, hydrogen, and biofuels make up a much greater share of energy use. By 2050, we project that electricity makes up 41% of total end-use energy consumption in the Global Net-zero Scenario, and 39% in the Canada Net-zero Scenario, up from 17% in 2021. Hydrogen and biofuels emerge as important alternatives when electricity may not be the best option to use, for example in heavy freight transportation, aviation, or certain industrial processes. By 2050, hydrogen makes up 12% of the energy mix and biofuels make up another 13% in the Global Net-zero Scenario.
Description: These three stacked area charts show end-use energy use by fuel in each scenario. The fuels are hydrogen, fossil fuel with CCUS, fossil fuel, bioenergy, and electricity.
Total energy use is similar to current levels until the mid-to-late 2020s in the net-zero scenarios, and then declines gradually. The decline is due to lower fossil fuel consumption, which is largely compensated by increasing electricity, bioenergy, fossil fuel with CCUS, and hydrogen consumption.
Total energy use increases modestly over the projection period in the Current Measures scenario, mostly from higher electricity use.
Description: This stacked area chart shows projected electricity demand in the Global Net-zero Scenario in the residential, commercial, industrial, transportation, and hydrogen sectors.
Electricity demand grows steadily in the residential, commercial, and industrial sectors. Transportation and hydrogen production, which are near zero now, become major drivers of growth in the projection.
Canada''s electricity system is regionally diverse, with the generation mix largely determined by the resources available in each province or territory. Many regions already have low-emitting electricity systems while others rely more on fossil fuels. This variation means that the transition of the electricity sector in each region is unique. Each region capitalizes on their own resources and technological expertise to drive the electricity sector towards net-zero.
Description: This column chart shows changes in electricity generation between 2021 and 2050 in the Global Net-zero Scenario, by technology. Wind sees the most significant increase, followed by nuclear, hydro, natural gas with CCUS, bioenergy, and solar. Other fossil fuels see a marked decline in terms of electricity generation.
Description: This stacked column chart shows GHG emissions from electricity generation over time in the Global Net-zero Scenario. Emissions are broken down by sources: fossil fuels, natural gas with CCUS, and bioenergy.
Total electricity generation has positive emissions before 2035. By the early 2030s, bioenergy becomes a net-negative source of emissions and more than offsets residual emissions from fossil fuels and natural gas with CCUS for electricity generation. Bioenergy then becomes an increasingly significant source of net-negative emissions until the end of the projection period.
As shown in FigureES.6, CCUS is used to capture CO2 emissions from the electricity, heavy industry, and oil and gas sectors in both net-zero scenarios. By 2050, nearly 60MT of CO2 are captured from these sectors using CCUS in the Global Net-zero Scenario, which is about 9% of Canada''s total GHG emissions in 2021. In the Canada Net-zero Scenario, almost 80MT of CO2 are captured by 2050, as there are more emissions to be captured from the greater amount of fuel used to produce oil and natural gas.
Description: This stacked column chart shows GHG emissions that are captured by CCUS in 2021, and in 2030 and 2050 in both net-zero scenarios. The emissions are broken down into three categories: fossil fuel electric generation, heavy industry, and oil and gas.
Captured emissions increase significantly in the net-zero scenarios compared with 2021. By 2030, both scenarios show over 20MT captured, led by the oil and gas sector. By 2050, heavy industry and fossil fuel electric generation capture more emissions. Captured emissions in the oil and gas sector increase from 2030 to 2050 in the Canada Net-zero Scenario, and decline in the Global Net-zero Scenario.
Description: This stacked column chart shows the evolution of hydrogen production over time in the Global Net-zero Scenario. Production is broken down by technology: natural gas with CCUS, biomass, and electrolysis.
Production increases nearly sevenfold from 2030 to 2050. Natural gas with CCUS and electrolysis are near equal and make up nearly all production until the mid 2030s, when electrolysis and biomass start growing faster.
In EF2023, the assumptions we make about the price of crude oil and natural gas have the largest impact on our projections for Canadian oil and gas production. Those prices are different in each scenario and are driven by the pace of global climate action in the future and the resulting amount of global demand for oil and natural gas.
In the Global Net-zero Scenario, we assume that global prices of oil and natural gas fall steeply in response to declining global demand for fossil fuels over the coming decades. In this scenario, we project that Canadian crude oil production falls to 1.2 million barrels per day (MMb/d) (194 thousand cubic metres per day (10³m³/d)) by 2050, 76% lower than in 2022 as shown in FigureES.8. As shown in FigureES.9, natural gas production falls by 68% over the same period, reaching 5.5 billion cubic feet per day (Bcf/d) (156 million cubic metres per day (106m³/d)) by 2050.
Description: This line chart shows the evolution of total crude oil production in million barrels per day and in thousands of cubic metres per day in all three scenarios.
Production plateaus in the mid-to-late 2020s and then drops sharply in the Global Net-zero Scenario. Production plateaus a few years later and at a slightly higher level in the Canada Net-zero Scenario. Production plateaus in the mid 2030s at the highest level of all scenarios in the Current Measures Scenario, and then declines modestly in the 2040s.
The CER has issued an errata to correct an error in the report.
Description: This line chart shows the evolution of total natural gas production in billion cubic feet per day and in thousands of cubic metres per day in all three scenarios.
Production plateaus in the mid-2020s and then declines in both net-zero scenarios. The decline is larger in the Global Net-zero Scenario. Production remains stable until the mid-2030s in the Current Measures Scenario, then increases until the projection period ends.
In the Current Measures Scenario, where prices are highest and future climate action is the least ambitious, crude oil and natural gas production are the highest, and so are emissions from the sector. Crude oil production reaches 6.1MMb/d (96410³m³/d) by 2050, 20% higher than in 2022. Production of natural gas grows to 21.5Bcf/d (607106m³/d), a 24% increase over the projection period.
Description: This stacked column chart shows the evolution of total sectoral GHG emissions in the Global Net-zero Scenario. The sectors are electricity, hydrogen production, oil and gas, direct air capture, heavy industry, buildings, transportation, LULUCF, and other.
The projection shows that net emissions have already plateaued and gradually decline to zero by 2050 in this scenario. Transportation and oil and gas show the steepest decline in the projection period. In the 2040s, electricity, hydrogen production, and direct air capture follow LULUCF in becoming increasingly significant sources of negative emissions.
Action to reduce emissions globally also plays an important role in our projections and what the paths to net-zero look like in our scenarios. Depending on the scenario, we assume that climate policies around the world drive technological innovation and create markets for low-carbon technologies. This innovation and market development results in our assumption of lower costs and better performance for low emission technologies in the net-zero scenarios. In addition, global climate action also factors into our projections by influencing the prices and exports of energy we produce, which are key drivers of our scenarios.
Nuclear power plants that have been scaled down in size and capacity.
A technology that removes CO2 directly from the atmosphere, where it can then be used or permanently stored in the ground
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