Canada’s Fossil Fuel Use Still Climbing. Here’s Why.

Canada often gets credit for ambitious climate targets and major investments in renewable energy. Billions flow into wind, solar, and other clean technologies.

Despite these investments, Canada hasn’t reduced fossil fuel consumption in absolute terms. Between 2010 and 2023, fossil fuel use rose by roughly the equivalent of adding the yearly energy demand of a large city.

Why? Canada’s total energy demand grows faster than the energy transition.

To take a closer look, check out Denis Koshelev’s article: Not As Green as Expected: Canada’s Fossil Fuel Use Is Still Rising.

Energy Demand Keeps Growing in Canada

Canada’s total energy consumption rose from 2010 to 2023:

• Total energy use increased 12%

• Population growth pushed overall demand higher

• Industrial activity expanded, especially in resource extraction. Energy use in mining and oil and gas extraction nearly doubled. 

  
  

Energy use per person declined since 2013. Efficiency improvements in appliances, buildings, and vehicles help, but are offset by population growth and industrial expansion.

In other words, efficiency works. It’s just not enough to reduce total demand.

Industry Remains the Largest Energy Consumer

Canada’s industrial sector used 31% more energy in 2023 compared with 2010.

Mostly in resource extraction:

• Oil sands operations 

• Mining operations 

• Processing and upgrading crude oil

  
  

When production expands, energy use follows.

Natural Gas Drives Fossil Fuel Increases

Among fossil fuels, natural gas grew the fastest. Since 2010, natural gas consumption climbed about 34%. It accounts for over one-third of Canada’s total energy use and is now the country’s largest energy source.

This shift reduced emissions per unit of energy compared with coal. However, it also increased overall gas consumption.

Alberta alone accounts for more than half of Canada’s natural gas use.

Oil Demand Stays Stable

Oil’s share of Canada’s energy mix slipped slightly, but total consumption barely changed.

From 2010 to 2023, refined petroleum product consumption fell by only about 2.8%.

Several trends helped prevent a larger decline:

• More vehicles on Canadian roads

• Continued demand for aviation fuel

• Petroleum products in manufacturing and industry

  
  

Electric vehicle adoption continues to grow. In 2023, EVs made up 10.8% of new vehicle sales. But internal combustion vehicles still dominate the fleet.

Population growth means the total number of vehicles continues to increase.

Coal Falling Fast

Coal is the one clear fossil fuel success story. Since 2010, Canadian coal consumption has dropped more than 60%. Many provinces have already phased it out of electricity generation, and the rest are expected to follow by 2030.

Today, coal represents only about 2 to 3% of Canada’s energy use.

But coal was never a large share of Canada’s total energy demand. The decline helps, but doesn’t dramatically change the overall fossil fuel picture.

Exports Shape Canada’s Energy System

Canada is a major energy exporter, and that affects domestic consumption.

In 2023:

• Canada exported nearly 80% of crude oil production

• About 42% of natural gas production went abroad

• Energy exports accounted for 28% of Canada’s goods exports

  
  

Producing, processing, and transporting those resources requires energy. That means export growth drives up domestic fossil fuel use. New natural gas export facilities on the West Coast may increase natural gas demand further in the near term.

The Challenge Ahead

Fossil fuels still dominate Canada’s energy system.

Today they account for roughly:

• 42% natural gas

• 33% oil

• 2% coal

  
  

Together, that’s about three-quarters of Canada’s total energy supply.

Canada already generates nearly 80% of its electricity from low-carbon sources, mostly hydro and renewables. Electrification, cleaner grids, and falling renewable costs could steadily shrink the fossil share.

But the current trend shows something important.

The energy transition isn’t just about building renewables. It also means reducing total fossil fuel demand, even as the economy and population continue to grow.