Industrial Consumption of Energy (ICE) Survey, 2020

Energy consumption in the manufacturing sector decreased by 0.1% from 2018 to 2019 ^{Footnote 1} and decreased by 7.7% from 2019 to 2020 ^{Footnote 2} . The sector GDP decreased by 0.1% between 2018 and 2019 ^{Footnote 1} and decreased by 9.6% between 2019 and 2020 ^{Footnote 2} . The global impact of the COVID-19 pandemic in 2020 could be one possible explanation for this significant decrease in energy consumption and GDP, that led to the underutilization of manufacturing facilities.

Figure 3 highlights some of the most significant changes in energy consumption levels that occurred in subsectors that had large fluctuations in outputs, including:

• Energy consumption in paper manufacturing decreased 38.5 percent from 2000 to 2020 (associated GDP decreased by 39.8 percent).
• Food Manufacturing consumed 14.8 percent more energy in 2020 compared to 2000 (associated GDP increased by 33.7 percent).
• Energy consumption in non-metallic mineral product decreased by 21.6 percent from 2000 to 2020 (associated GDP increased by 16.1 percent).

The fuel mix used by the manufacturing sector has changed since the 2008/09 recession with natural gas representing 31.5 percent of energy use in 2020, up from 27 percent in 2009, while electricity use has remained constant during that period (29 percent share). The price of natural gas fell from 33.5¢ per cubic metre (¢/m³) in 2008 to 11.2¢/m³ in 2020 while industrial electricity prices, on a national basis, increased 23 percent from 7.1¢/kWh in 2008 to 8.8¢/kWh in 2020. Increased use of natural gas could be attributed to industries looking to reduce their carbon emissions, as natural gas is a cleaner burning fossil fuel, as well as to the lower natural gas prices.

While the total sector saw a reduction in energy consumption, in 2019, the energy consumption values for the two largest energy using fuel sources in the manufacturing sector (natural gas and electricity) increased in comparison to their respective 2018 values. However, in 2020, the energy consumption values for natural gas and electricity decreased from both the 2018 and 2019 values.

Significant reductions were evident in the consumption of many energy sources from 2000 to 2020, in particular heavy fuel oil, propane, middle distillates, coal, coke, and spent pulping liquor, whereas the use of steam increased substantially as surplus steam produced during power generation and industrial processes was being recovered. Most notably the use of heavy fuel oil in the manufacturing sector decreased by 95.3 percent. According to Statistics Canada, heavy fuel oil is second only to coal as a carbon-intensive fuel, and as such has been the target of environmental restrictions on emissions. The decline can thus be attributed to manufacturers substituting other energy sources, as well as the reduced use of energy overall by users of heavy fuel oil. The petroleum and coal product manufacturing subsector has experienced the largest reduction in the use of heavy fuel oil, by 97.5 percent from 2000 to 2020.

After a brief pause during the 2008/09 recession, manufacturing energy intensity ^{Footnote 3} was on a decline till 2019. However, in 2020, the energy intensity in manufacturing sector increased by 2.1%. In 2020, energy intensity was about 9.5 percent below the pre-recession peak of 2009, while it was 11.4 percent below the pre-recession peak of 2009, in 2019. Longer term, energy intensity still declined 8.4 percent from 2000 to 2020 ^{Footnote 4} . This represents an absolute drop in the sector’s energy use of about 574.2 petajoules (PJ), which is roughly equivalent to the amount of energy consumed by cars in Ontario, Alberta, and Saskatchewan combined in 2020 ^{Footnote 5} .

Over the 2000-2020 period, activity in the manufacturing sector ^{Footnote 6} shifted. The shift was from paper manufacturing, the subsector with the highest rate of energy use per unit of gross domestic product (GDP), toward less energy-intensive industries (such as chemical and food manufacturing). This change in manufacturing activity, combined with efficiency improvement in other energy-intensive subsectors, resulted in an overall reduction in energy intensity of the manufacturing sector from 12.3 megajoules per dollar of GDP (MJ/$GDP) in 2000 to 11.27 MJ/$GDP in 2020.

In 2020, the manufacturing sector generated $180 billion in GDP (constant 2012 dollars) and consumed 2,023 petajoules (PJ) of energy. This amount is roughly equal to twice the consumption of motor gasoline and diesel fuel oil in total passenger transportation in 2020 ^{Footnote 7} .

The improvement in the energy intensity trend is evident over both the long and short term. The sector continued its recovery from the global economic downturn in 2009, as GDP increased steadily till 2019. Figure 1 indicates that output of the manufacturing sector had outpaced energy use, resulting in continued improvement in energy intensity till 2019. It also shows a significant decline in energy consumption and GDP, and an increase in energy intensity from 2019 to 2020, potentially due to COVID-19 induced lockdowns and their impact on the global supply chain.

An important contributor to this improvement is the Canadian Industry Partnership for Energy Conservation (CIPEC) , which supports a network of almost 2,400 facilities, and more than 50 trade associations working together to cut costs, improve energy efficiency, and reduce industrial greenhouse gas (GHG) emissions. To encourage and support industry’s energy efficiency efforts, NRCan offers Canadian industry tools and services through CIPEC. These include benchmarking reports, best practice guides and cost-shared assistance.

Table 2 demonstrates that five of the seven most energy-consuming subsectors reported a decline in energy use in 2020 compared to 2000, with the most significant decline being in paper manufacturing (-38.5 percent). However, paper manufacturing’s energy intensity still rose by 2.1% over that period, since its GDP declined by more than its reduction in energy use. Several factors can influence the amount of energy used by a particular industry, such as its level of economic activity, its structure, and how efficiently it uses energy. Adopting more efficient energy-related processes or technologies helps an industry reduce its demand for energy. Examples are waste energy recovery and re-use, and cogeneration in the paper manufacturing subsector.

Figure 2 shows that five of the seven most energy consuming subsectors experienced a decrease in energy intensity from 2000 to 2020. Significant decreases occurred for Non-Metallic Mineral Product Manufacturing (-32.5 percent), Chemical Manufacturing (-19.6 percent) and Food Manufacturing (-14.1 percent).