Canada can't meet emission reduction targets without faster deployment of clean tech: report

The steel mills in the waterfront harbour are shown in Hamilton, Ont., in 2018. THE CANADIAN PRESS/Nathan Denette

If Canada wants to hit its emission reduction goals for 2030 and 2050, it needs to scale up deployment of made-in-Canada clean technology, according to a new report.

The report, released Tuesday by Deloitte Canada, argues that the country won’t be able to reduce its greenhouse gas emissions by 40 to 45 per cent below 2005 levels by 2030 without creating a better roadmap for how it will accelerate development and utilization of domestically made clean tech.

Karen Hamberg, partner in financial advisory and national clean technology leader for Deloitte Canada, told CTVNews.ca in a phone interview that this is an area overlooked by Canada’s climate plan.

“There's been incredible analysis and activity around our net-zero 2050 target, around the 2030 emission reduction plan,” she said. “They've analyzed ‘is it feasible, what's it going to cost, what type of investment is needed,’ but one piece that's always been missing is the degree to which made-in-Canada clean technology is going to be part of our solutions and how it's going to be deployed domestically as part of our 2030 and 2050 goals.”

Canada has numerous companies and initiatives developing clean technology, but to make a real impact on our emissions production, this technology will need to be able to move beyond ideas and pilot projects and be implemented more widely, the report says.

• Climate Barometer newsletter: Sign up to keep your finger on the climate pulse

But this will require an overhaul of how many of our industries work — a process which will require a lot of logistics that aren’t being properly considered right now, Hamberg said.

“There's a whole commercial ecosystem that needs to be built up for the successful deployment of these clean technologies at scale,” she said.

“Until we actually think about the whole commercial ecosystem that needs to come to be put in place, we're just not going to make the progress that we need in time for 2030 or 2050.”

Hamberg said it will take around 12 to 15 years to fully commercialize some of the clean technology just coming to market now, making it more crucial to accelerate that process now.

“2030 is seven years away,” she said. “It is the technology that's commercially available today that's going to get us to that 40 to 45 per cent emission reduction target.”

The 2030 target would mean dropping from 2019’s 730 megatons of emissions to 443 megatons by 2030.

The report notes that the clean technology industry has the capability to provide new jobs, future growth, decarbonization and a healthier environment, making it an economically and environmentally sound area for investment.

But it says that Canada is missing key plans needed to set this up, such as investing in training programs to help industry experts get to know new tech as it is available.

“There's a significant skills and talent component to this,” Hamberg said. “Everything from EV maintenance and manufacturing, building of charging stations through to the executive talent that is going to be required for commercialization and industrial scale.”

Canada’s Economic Strategy Tables set out a goal for clean technology to be one of Canada’s top five exports by 2025, increasing in value to $20 billion. However, 2020 exports were only around $7.1 billion, meaning that an annual growth rate of more than 30 per cent would be required in order to hit $20 billion by 2025, the Deloitte report noted.

Clean technology in Canada, the report stated, includes approximately 1,100 companies and represents more than 210,000 jobs and around 3.1 per cent of Canada’s GDP.

HOW CLEAN TECH IS EVALUATED

The definition of clean tech has expanded in recent years to include not just products and services that deliver environmental benefit, but tools and technologies that deliver greenhouse gas reductions as well as leading “to more circular economies through recycling and regeneration and reuse of resources and materials,” Hamberg said.

“It's really all of those technologies, products, services, that really are going to contribute to more sustainable, resilient, healthier communities in a net zero economy.”

The measure of commercialization is if that technology has not only been proven successful through use, but can also be immediately ordered and produced.

The report laid out a framework for assessing the commercial readiness of specific clean tech across four different key areas:

• Technical readiness, meaning how a certain clean technology performs in terms of emissions reductions and whether it is ready to be applied at scale;
• Market readiness, meaning whether a support structure is in place for the technology to be deployed and properly utilized;
• Policy readiness, meaning whether there are policies in place to facilitate the adoption of a new technology widely across an industry;
• Organizational readiness, meaning whether companies have internal systems in place to commercialize their tech.

In this framework, a company’s clean technology is rated and given a score from one to five across these four areas. For instance, a clean technology assessed to be a five in technology readiness would have been proven to be a low-emission technology that is available “within a highly competitive commercial environment,” but if it was assessed as a one on the organizational readiness scale, that would mean that the tech had been developed with “no tie to industry or partner needs.”

The idea is to get the ball rolling on considering the frameworks necessary to make clean tech actually take off in Canada, Hamberg said.

“(It looks at) what needs to be in place from a market perspective, from a technical viability perspective, what sort of policy and regulatory frameworks need to be in place, and then the capacity of the company itself to deploy at commercial scale,” she said.

“Market creation development (is) as important as tech development.”

The report also looked at the challenges and potential solutions across the seven economic sectors that make up Canada’s greenhouse gas emissions.

For instance, some of the challenges facing the move to clean technology in the oil and gas sector, which makes up the largest chunk of Canada’s emissions at 26 per cent, are infrastructure bottlenecks and the industry potentially not wanting to risk the loss of production that would come from technology downtime as the industry shifts to clean technology.

Transport makes up 25 per cent of Canada’s emissions, but one challenge the report highlights as facing this sector’s transformation to clean tech is that the value chain elements — a product or service’s necessary aspects, from materials all the way to a product’s delivery to market — needed to support zero-emission vehicles “are not maturing at pace.”

One of the factors that may accelerate the transition to clean technology among buildings, Canada’s third highest emissions producer at 12 per cent, is that we currently have the ability to decarbonize buildings without increasing household energy costs, the report notes. However, renovations and retrofits of existing buildings can be cost-prohibitive.

Hamberg noted that Canada has made moves to invest in clean technology, but said that more could be done on implementing Canadian tech here at home.

She added that numerous Canadian companies are making strides in developing clean technology, but often that technology is slow to get picked up within Canada.

Last year, the 2022 Global Cleantech 100 list, which spotlights clean technology companies thought to have the most market significance, featured 13 Canadian companies.

“We absolutely do have technology that is best in class, best in the world, and it's exported all over the world,” Hamberg said. “And so then the question is, why not in Canada? That's a question around the private sector, around support for deployment rather than just development. How then do we ensure that our private sector is maybe the first or even the second to adopt made in Canada commercial clean technology?”

This Deloitte report will hopefully spur companies and governments alike to start thinking more about how to scale up clean tech in Canada, she said, adding that she hopes the federal government’s Regional Energy and Resources Tables will consider it as it sorts through priorities for decarbonization and economic development associated with reducing emissions.

We can start using more clean technology right now, she said.

“I'm certainly hopeful and very optimistic that the public sector — so whether it's federal or provincial — continue to look at the demand side of the equation, as well as the supply side, and … recognizing that there have been significant investments made in clean teach for the last 20 years, that tech is now ready to be commercially deployed today.”