Not As Green as Expected: Canada’s Fossil Fuel Use Is Still Rising

March 12, 2026

By Denis Koshelev

Canada is a nation often lauded for its ambitious climate goals and substantial investments in renewable energy. However, while the world increasingly pivots towards a greener future, a closer look at Canadian energy consumption reveals a surprising and concerning truth: Despite all efforts, the country has failed to reduce its fossil fuel consumption in absolute quantities.

From 2010 to 2023, Canada’s total fossil fuel consumption increased by 579.1 petajoules — equivalent to adding the annual energy consumption of a sizeable city. This increase occurred despite $100+ billion in renewable energy investments and aggressive climate targets. (Statistics Canada, 2024, 2025a). This stark reality challenges the prevailing assumption that the rise of renewable energy automatically equates to a decline in fossil fuel use, exposing the intricate and often resistant dynamics at play between burgeoning energy demand and the pace of our energy transition.

Energy Consumption Trends and Overall Demand Growth

Canada's total energy consumption increased substantially from 2010 to 2023, growing by 907.1 PJ (12.0%) from 7,578.2 PJ to 8,485.2 PJ. This growth reflects several key drivers, including population expansion, economic development, and increased industrial activity, particularly in the oil and gas extraction sector.

The mining and oil and gas extraction subsector alone increased its energy consumption from 715,139 terajoules in 2010 to 1,352,807 terajoules in 2023 (Statistics Canada, 2025a).

Interestingly, while Canada's overall energy consumption has risen, energy consumption per person has seen a general decline since 2013, as illustrated in the chart. This suggests that efficiency measures are having an impact on an individual level, however, this per capita decrease has been insufficient to offset the substantial energy demands from a growing population and expanding industrial activity, leading to higher absolute consumption overall. (Energy Institute et al., 2024).

Sectoral Energy Demand Analysis

The industrial sector continued to be the largest energy consumer, accounting for 3,020,353 terajoules in 2023, up from 2,299,000 terajoules in 2010. This 31.4% increase was driven primarily by expanded mining and oil and gas extraction activities, which nearly doubled their energy consumption during this period.

The transportation sector showed a decrease, from 2,614,280 terajoules in 2010 to 2,560,506 terajoules in 2023, with most consumption occurring through retail pump sales for personal vehicles. The growing adoption of electric vehicles (EVs) is significantly diminishing our dependence on conventional fossil fuels. Concurrently, continuous advancements in technology have yielded more fuel-efficient internal combustion engine (ICE) vehicles, thereby lowering overall energy demand. Furthermore, the COVID-19 pandemic dramatically curtailed travel and transportation, resulting in a substantial but now gradually rebounding decline in energy consumption. (Canada Energy Regulator, 2023b; Environment and Climate Change Canada, 2025).

Despite energy efficiency improvements across residential and commercial sectors, absolute consumption in these areas remained relatively stable due to population growth and increased building stock.

The residential sector consumed 1,303,224 terajoules in 2023, compared to 1,328,286 terajoules in 2010, illustrating the impact of efficiency measures while also revealing how population growth offset potential reductions. (Statistics Canada, 2025a)

According to research on industrial energy consumption patterns, "expanding production in the industrial sector often leads to consuming more energy".

Fossil Fuel Consumption Breakdown by Type

Natural Gas: The Primary Driver of Fossil Fuel Growth

Natural gas consumption experienced the most dramatic increase, rising by 34%. (Natural Resources Canada, 2023). Natural gas became Canada's dominant energy source, accounting for 37.6% of total energy consumption in 2023, surpassing refined petroleum products for the fourth consecutive year. This growth was driven by several factors, including industrial expansion, particularly in Alberta's oil sands operations, where natural gas is used for steam generation and upgrading processes.

The shift toward natural gas was also influenced by environmental policies that promoted it as a "cleaner" fossil fuel alternative to coal and heavy oil. However, this transition, while reducing emissions intensity per unit of energy, significantly increased absolute consumption quantities. Alberta alone consumed approximately 6.7 billion cubic feet of natural gas per day in 2023, with over 50% of the nation's consumption occurring in that province. (Canadian Association of Petroleum Producers, 2025; Natural Resources Canada, 2025a)

Enerdata reports that since 2020, natural gas consumption has increased by 3% annually, reaching 155 billion cubic meters (bcm) by 2024. This sustained growth underscores the ongoing demand for the fuel across various sectors of the economy. The CER projects that this demand will continue to grow in the near term, as Alberta's electricity producers aim to phase out coal completely by 2023, with natural gas serving as the primary replacement fuel (Canada Energy Regulator, 2023a). However, the CER's longer-term projections suggest that this growth will eventually taper off and begin to decline, as increasing use of renewables in power generation, the blending of renewable natural gas and hydrogen, and energy efficiency improvements begin to offset demand. Despite this projected future decline, the recent and current trend is one of robust growth, highlighting the central role of natural gas in Canada's present-day energy system.

Enerdata reports align with long-term trends observed by the Energy Institute, which notes that natural gas remains a critical component of Canada's energy mix, accounting for about 3% of global consumption. (Energy Institute et al., 2024)

Data on natural gas consumption varies between reporting agencies due to different scopes and methodologies, but all sources confirm a strong upward trend.

Petroleum Products: Relative Stability Despite Efficiency Gains

Historically, the share of oil in Canada's total energy mix has decreased slightly, but the absolute volume consumed has remained stable. In 2024, oil accounted for 33% of total energy consumption, making it the second-largest fossil fuel source after natural gas. The Canada Energy Regulator projects that the use of refined petroleum products (RPPs) will gradually fall throughout its projection period, driven by declines in gasoline and diesel demand. However, this decline is expected to be gradual, with demand for RPPs used for non-combustion purposes and aviation fuel remaining relatively steady.

Refined petroleum products consumption showed remarkable stability, decreasing only slightly by approximately 86.3 PJ (-2.8%) from 3,107.0 PJ in 2010 to 3,020.7 PJ in 2023. This relative stability occurred despite significant improvements in vehicle fuel efficiency and the beginning of electric vehicle adoption. Petroleum products represented 35.6% of total energy consumption in 2023. (Statistics Canada, 2024)

The transportation sector continued to dominate petroleum consumption. While electric vehicle registrations reached 10.8% of new vehicle sales in 2023 (Canadian Centre for Energy Information), representing more than a nine-fold increase since 2017, the absolute number of internal combustion vehicles on Canadian roads continued to grow due to population expansion. The impact of the COVID-19 pandemic temporarily reduced transportation fuel demand in 2020, but consumption rebounded strongly by 2022-2023.

Recent data on greenhouse gas emissions from the oil and gas sector provides further evidence of stable consumption. While emissions from oil sands production have increased significantly, emissions from conventional oil and natural gas have decreased, leading to a net increase of 21% in the sector's emissions between 2000 and 2022 (Natural Resources Canada, 2024). This suggests that the overall consumption of oil-derived products has not seen a substantial decline.

According to the 2024 Energy Institute Statistical Review of World Energy, Canada’s consumption of oil products has remained relatively stable over the past decade, with oil accounting for approximately 31% of the country’s primary energy consumption in 2023. In absolute terms, oil consumption in Canada was 4.35 exajoules in 2023, a slight increase from 4.31 exajoules in 2022. (Energy Institute et al., 2024).

Coal: Significant Decline but Limited Impact on Total Fossil Fuel Consumption

Coal use in Canada, both as a share of the energy mix and in absolute physical quantity, has collapsed since 2010. Though coal comprised only a small fraction of total energy demand even in 2010, actual coal and lignite consumption within Canada fell dramatically over the next decade and a half. In 2010, Canadian coal and lignite consumption stood at around 50,000 kilotonnes (kt), but by 2024, it had dropped below 20,000 kt – a decline of more than 60%.

The decline in Canada's coal consumption is a long-term trend that began around 2008. According to data from Enerdata, coal and lignite consumption have been decreasing regularly and rapidly since that year. This trend is a direct result of federal and provincial policies aimed at reducing the environmental impact of electricity generation. The Government of Canada's regulations, first introduced in 2012, mandated the phase-out of traditional coal-fired power plants, initially with a deadline of 2061, which was later accelerated. This policy certainty provided a clear signal to provinces and industry, driving investment away from coal and towards cleaner alternatives like natural gas and renewables. As a result, seven out of ten provinces are now coal-free, with the remaining provinces on track to be off coal by 2030, three decades earlier than the original timeline. (Noel & MacDougall, 2024).

According to the Energy Institute’s Statistical Review of World Energy 2024, Canadian coal consumption dropped from 0.86 exajoules (EJ) in 2013 to just 0.37 EJ in 2023, a decline of more than 55% in a single decade. Coal’s share of primary energy consumption in Canada is now just 2.6%, down from already modest levels a decade ago. This is mirrored in electricity generation: coal-fired generation fell from 26.2 terawatt-hours (TWh) in 2022 to 23.6 TWh in 2023, while renewables and hydro together provided well over two-thirds of Canada’s total electricity supply. (Energy Institute et al., 2024).

Exports Drive Domestic Consumption

Canada's role as a major fossil fuel exporter significantly influenced domestic consumption patterns. The country exported 79.9% of its crude oil production and 41.9% of its marketable natural gas in 2023, with virtually all exports directed to the United States. This export orientation created strong economic incentives for continued fossil fuel production and associated energy consumption.

Energy exports totalled 14,781 petajoules in 2023, representing 28% of total Canadian goods exports and generating significant economic value. The economic importance of energy exports created political and economic pressures that supported continued fossil fuel development and consumption, even as climate policies sought to reduce emissions.

Canada's integration with U.S. energy markets influenced domestic consumption patterns through price signals and infrastructure development. The completion of major pipeline projects and expanded electricity interconnections facilitated continued fossil fuel trade and consumption growth.

The development of liquefied natural gas (LNG) export capacity in British Columbia, with the first facility scheduled to come online in 2025, marks a new phase of export-driven growth in natural gas consumption. (Statistics Canada, 2025b). These facilities require substantial energy inputs for liquefaction and transportation, adding to domestic fossil fuel consumption even as they support export revenues.

Verdict

Despite efforts to transition to cleaner energy sources, fossil fuels continue to dominate Canada's energy mix.

Its share has remained remarkably consistent over the past decade, highlighting the persistent challenge of decarbonizing the energy system. The breakdown of this share in 2024 was 42% for natural gas, 33% for oil, and 2% for coal. The IEA reported a similar figure for 2020, with fossil fuels making up 75% of Canada's total energy supply (TES) (Natural Resources Canada, 2022).

This dominant share underscores the scale of the challenge facing Canada in its efforts to meet its climate commitments. Still, there is a credible path to cut the fossil share of total energy to below 50% by 2035 and to net-zero by 2050, driven by an almost fully decarbonized electricity grid, mass electrification of transport and heating, and the accelerating cost advantage of wind, solar and batteries. After all, 79% of the power actually generated in 2024 came from low-carbon sources.

The federal Clean Electricity Regulations that take effect in 2035 allow only 1% of generation to be unabated fossil, effectively banning coal and severely curtailing gas. (Ember, 2025; Government of Canada, 2025).