Home Month and Year September 2021 Alberta Manufacturers Need to Watch the Net Zero Drive

Alberta Manufacturers Need to Watch the Net Zero Drive

David McLean

The biggest long-term trend in global manufacturing is the drive for net-zero emissions. Alberta manufacturers (large and small), ignore it at their peril.

This is part of a broader push for measurable environment, social and governance (ESG) plans. Everywhere you look, Canadian companies are signalling their intent to achieve net-zero status within the next 30 years.

Ford Canada’s Oakville Assembly Complex is retooling its global hub for battery electric vehicle production. This $1.8 billion investment represents one of the most significant investments in the province’s auto sector in a generation.

Vale has committed to investing around US$2 billion in renewable energy over the next 10 years to support and bring solutions to the low carbon economy.

Rio Tinto plans to spend $1 billion on climate-related projects in Canada and abroad to reduce absolute emissions by 15 per cent by 2030.

Cenovus continues to work on solvent co-injection technology in the oil sands and is part of the Oil Sands Pathway to Net Zero alliance, which plans to reduce oil sands emissions by 68 megatonnes of CO2 over the next 30 years. The first phase of the plan includes a massive carbon capture and storage trunkline connecting the oil sands to a carbon sequestration hub near Cold Lake.

These are the titans of Canadian industry and they are responding to demands from policy makers (including the Alberta government), shareholders, employees and the communities in which they operate. Inevitably, they will turn to their suppliers for similar actions and that’s why small and medium-sized companies need to follow closely.

For the overall sector, net zero does not mean the full elimination all emissions. The goal is to, through wide range of actions, both reduce and offset the GHG emissions of the sector through measures such as tree planting or employing technologies that can capture carbon before it is released into the air.

Manufacturers have been moving in the right direction for decades. The sector’s emissions intensity, defined as the volume of emissions per unit of real GDP, has also been improving, especially over the last 10 years, declining at an average annual rate of 2.1 per cent between 2009 to 2019. Both these trends will need to continue if we are going to hit our targets.

If we want Canadian industry to succeed in achieving net zero in the medium term and maintain economic growth, manufacturers will need national and provincial plans. That could mean direct investment supports for emitters of all sizes to help them adopt new technologies. Canada will need to develop transition strategies with our key trading partners to ensure we are aligned and simply don’t push emissions (and jobs) to competing jurisdictions with lower standards.

Achieving net zero won’t be easy, but it will be necessary. Edmonton manufacturers need to stay ahead of the curve or risk being left behind. Policy makers must be at the table ready to support them.

Canadian Manufacturers & Exporters (CME) is the voice of Canadian manufacturing. CME represents more than 2,500 companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada’s exports.