Chemicals and plastics are the basic materials of industrial society, with an estimated 96% of manufactured products relying on them to some extent. Production is concentrated in Ontario (45%), Alberta (25%), and Quebec (16%), sited close to fossil feedstocks and manufacturing capacity. What makes the sector uniquely difficult to decarbonize is that oil and gas supply both the high-temperature heat and the carbon and hydrogen atoms that end up inside finished products, so decarbonizing energy alone cannot bring the sector to zero.
Reaching net zero requires progress on four fronts at once: electrifying and fuel-switching process heat, capturing emissions that cannot be avoided, substituting recycled, biomass, and captured-carbon feedstocks for fossil ones, and reducing demand for virgin material through product design and circularity. Most production-side technologies remain at pilot or demonstration stage, and facilities are capital-intensive with decades between major reinvestment windows. Meanwhile global chemical production is expected to triple by 2050 against 2010 levels.
Oil and gas supply both process heat and the carbon and hydrogen embedded in the products, so clean energy alone cannot eliminate emissions.
Electrified crackers, alternative feedstocks, and carbon capture are largely pre-commercial or uneconomic today.
Facilities are already highly optimized and capital-intensive, with decades between renewal windows that funding programs often miss.
Uncertain or low carbon prices undercut the investment case for capture and low-carbon retrofits.
Only 7% of discarded plastic was recycled in 2021, and recycled resin loses on price to virgin plastic whenever oil and gas are cheap.
Controlling release of plastics, refrigerants, and fertilizers into the environment, and their persistent and bioaccumulating effects.
Emissions from product disposal could reach half of sector emissions and sit largely outside current accounting boundaries.
Limited sustainable biomass, captured carbon, recycled material, and affordable clean electricity to supply a growing market.
Sourcing the carbon atoms chemicals require once fossil extraction winds down.
As transport fuel demand falls, chemical feedstocks could shift from a secondary to primary output of oil and gas slowing decarbonization.
Share of site energy supplied by clean electricity or low-carbon fuels.
Share of production inputs drawn from recycled, biomass, low-carbon hydrogen, or captured-carbon feedstocks.
Share of plastic diverted from landfill.
Most decarbonization technologies remain at early maturity, so deployment could build domestic technology and expertise rather than importing it later.
Collection, sorting, and reprocessing infrastructure recovers value currently landfilled.
Early Canadian low-carbon production could serve buyers with lifecycle emissions targets.
Scores are grounded in the sources cited throughout each sector assessment, then reviewed by experts and industry stakeholders to confirm how each pathway elements criteria are ranked.
economic viability score
Economic Viability description
