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Ontario’s fuels sector is made up of rich diversity of fuels which are produced and delivered through a variety of means and markets. Fuels serve Ontario consumers in many applications ranging from space and water heating and cooking, to transportation, electricity generation and non-energy related industrial processes. This mix of fuels is supplied in a dynamic marketplace that has a long record of success in meeting the fuel energy needs of the province.
Looking forward, a key priority of the Government of Ontario is decarbonisation of the economy, including the fuels sector, in order to meet its climate change objectives. It is expected that reducing greenhouse gas (GHG) emissions will also continue to be a focus of other provinces and regions that supply fuel products to Ontario.
From an Ontario perspective, with GHG-emitting fuel use in the electricity sector being substantially reduced over the past decade, the largest contributors of fuels-related GHG emissions are the transportation, industrial combustion and residential sectors in the province. Therefore, it is in these sectors that Ontario can take action to see significant GHG reductions, by introducing new low-carbon alternative fuels, promoting fuel-switching to cleaner energy sources and increasing energy conservation.
Ontario’s Climate Change Action Plan (CCAP) outlines the government’s intent to target these sectors with a variety of initiatives, programs and projects that will help to move Ontario to a low-carbon economy future. Ontario’s economy-wide cap and trade program will also concurrently provide a market-based mechanism that incents business to reduce their GHG emissions. Finally, Ontario will also stand to benefit for the efforts of its neighboring jurisdictions to decarbonize the fuels supplies they ultimately deliver to Ontarians.
Ontario’s transition to a low carbon economy will have significant implications for its fuels sector, creating new opportunities as well as future risks that require consideration from government policy makers. This report illustrates the potential impacts associated with the transition from conventional fuels to lower carbon alternatives in the various demand outlooks examined. Outlooks examined in this report are meant to provide insight into future possibilities, rather than to be deterministic.
A number of insights arise from the analysis conducted for this report which highlight key considerations for the fuels sector and its stakeholders. These include:
- There will be value in maintaining flexibility in Ontario’s fuels sector. The wide range of fuels in use today reflects the diverse energy needs of the Ontario economy as well as how the sector has successfully adapted and evolved as those needs have changed over time. Options for the future will similarly need to serve that diverse range of needs. Maintaining flexibility will allow options for responding to the considerable uncertainty associated with the outlooks of future demand and supply markets and particularly with regard to technology development and innovation in fuels, vehicles and infrastructure. New options and approaches are likely to materialize in the future. Preserving and developing a mix of alternatives can preserve the ability to adopt the most promising solutions in the future.
- Many alternative fuel technologies are technically feasible today. This report illustrates the range of fuels and technologies available in Ontario’s fuels sector, as well as regulatory and policy levers that can support adoption.
- Choices should be considered in the context of the broader integrated energy system. As demonstrated through this report and the OPO, changes in one sector can have material implications for other sectors, particularly when converting from one energy resource to another. Understanding those implications will be important in deciding on an integrated energy future.
In summary, Ontario has a range of options available in the fuels sector to meet societal goals for GHG reductions and economic objectives. To support LTEP consultations, this report has laid out the context of how Ontario meets energy demands through the fuels sector today, and examines some of the implications of different options for the future.