Pharmaceutical Manufacturing

NAICS CODES: 3254 – Pharmaceutical and Medicine Manufacturing (also relevant for 541710 – Research and Development in the Physical, Engineering and Life Sciences)

The pharmaceutical manufacturing industry consists of companies that develop and produce medicines and related products at commercial scale, supplying hospitals, pharmacies, and the public. It spans active pharmaceutical ingredient (API), biologics, and finished dosage manufacturing, by both multinational firms and contract manufacturers (CDMOs).

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GHG Emissions
  • 0.3
    Mt CO2e
0.04% of Canada's emissions
Establishments
  • 771
    establishments
2024
Employment
  • 35K
people employed, 2024

Energy Use & Emission Sources

Energy Use
Energy use is dominated by heating, ventilation, air conditioning and refrigeration (HVAC/R).
HVAC/R mainly uses natural gas and electricity and is roughly 70% of on-site energy, due to strict climate and air quality requirements. Electricity also supplies fans, chillers, lighting, and process equipment.
Sources
Direct emissions
Few Canadian pharmaceutical manufacturers are large direct emitters. Direct emissions come from natural gas for steam and space heating and from refrigerant leakage.
Indirect emissions
Some indirect emissions are from electricity use and depend on grid carbon intensity. Non-electrical indirect emissions can far exceed direct emissions, particularly raw materials, transportation, packaging, and downstream product use, notably metered dose inhalers (MDIs). API manufacturing, the most emissions-intensive stage, occurs largely outside Canada.

Key Emission Sources & Decarbonization Actions

HVAC/R Systems
Direct
Description
Ventilation required for clean rooms and fume hoods, make-up air units, chilled water, hot water and steam for manufacturing processes, space heating and cooling, refrigeration.
Key Actions
  • Replace fossil-fuel heating systems with electric heat pumps and reduce heating demand with waste heat recovery.
  • Transition gas-powered absorption chillers to electric systems and upgrade air conditioners to heat pumps.
  • Optimize air change rates and reduce ventilation energy demand with variable air volume systems.
  • Replace high-global warming potential (GWP) refrigerants with lower-impact alternatives.
Plug Loads & Processes
Direct
Indirect
Description
Lighting, lab and bulk manufacturing equipment (mixers, centrifuges, motors), sterilization and drying equipment, water heating, forklifts, and other non-HVAC electrical or fossil fuel loads.
Key Actions
  • Electrify steam and heat processes using electric boilers or heat pumps and reduce heating demand with waste heat recovery.
  • Reduce energy demand by upgrading chillers, dryers, motors, and lighting to high-efficiency models, installing smart-sensors, and implementing energy management systems.
Raw Materials
Indirect
Description
Manufacturing of APIs, excipients (non-active ingredients), bulk chemicals, and biological products.
Key Actions
  • Procure raw materials from low-carbon suppliers.
  • Apply green chemistry principles and process efficiency improvements when manufacturing raw materials on-site.
Downstream Use of MDIs
Indirect
Description
MDIs use hydrofluorocarbon (HFC) propellants, which are potent greenhouse gases released when patients use the device for respiratory diseases such as asthma.
Key Actions
  • Offer alternatives such as dry powder inhalers or soft mist inhalers where clinically appropriate.
  • When MDIs are necessary, provide smaller-volume relievers.
  • Collaborate with physicians and pharmacists to improve patient education on use and disposal.
Product & Material Transportation
Indirect
Description
Refrigerated ground vehicles, temperature-controlled vans, and cold chain containers via air, rail, and marine freight for inbound materials and outbound product distribution.
Key Actions
  • Switch short-haul and last-mile vehicles to electric alternatives as they become available.
  • Optimize routes and shipment loads to reduce unnecessary fuel use.
  • Prioritize rail and marine over air freight.
  • Switch to lower-GWP refrigerants in refrigerated transport units.
Packaging
Indirect
Description
Plastics, glass, aluminum, and paper used for syringes, vials, blister foils, IV bags, and other product packaging.
Key Actions
  • Reduce unnecessary packaging.
  • Transition to packaging that can be re-used or recycled and where possible replace petroleum plastics with biodegradable alternatives, cardboard, aluminum, or glass.
  • Seek out packaging from low-carbon providers.

Growth & competitiveness benefits

Market Growth
Early movement before regulatory or procurment changes
Early movers are better positioned to capture trade opportunities as international partners and customers increasingly apply climate criteria to procurement. Many major Canadian pharmaceutical companies have already committed through the Net-Zero Challenge or the Science Based Targets initiative.
Brand & Leadership
Credibility with institutional buyers
A credible net-zero strategy strengthens relationships with clients, investors, and institutional buyers, and signals responsible risk management. In a sector built on credibility, demonstrated climate leadership reinforces brand value and supports talent attraction and retention.

Additional Resources

Pharmaceutical Manufacturing
See our full primer developed in collaboration with Environment and Climate Change Canada to get started.
See more
GHG Protocol
Guidance on calculating Scopes 1, 2, and 3 emissions and communicating results consistently.
See more
ISO 14064
International standard to quantify, report, and verify GHG inventories by third parties.
See more
Net-Zero Challenge
Voluntary net-zero commitment program from the Government of Canada.
See more

Sector Title

Primary Title
Secondary title
Priority
Decarbonization Pathway
Role in Net-Zero System

Signal to Decision-Makers

Deploy
Signal Description

Alignment with Carbon Neutrality

carbon score
Alignment with Carbon Neutrality description

Economic

Economic viability

economic viability score

Economic Viability description

Economic development

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Economic development description

Technical

Maturity

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Operational fit

Operational Fit score
Operational Fit description

Infrastructure & supply

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Infrastructure & supply description

Social

Social acceptability

Social acceptability score
Social acceptability description

Relevance to stakeholders

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Relevance to stakeholders description

Related benefits & costs

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related benefits description