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Paper and primary metal remain the top energy consumers – 2021

November 23, 2022 – Energy consumed by the manufacturing sector last year (2021) increased by 4.3% from 2020 to 2109 petajoules (PJ), reports Statistics Canada, reversing the downward trend experienced during the first year of the pandemic.

(For context, 1 PJ is roughly the amount of energy required to operate the Montreal subway system for one full year, Statscan explains.)

Understandably, public health measures put in place to reduce the spread of the covid—along with disruptions in global supply chains—restricted economic activity. By mid-December 2020, vaccines became available and, in 2021, restrictions were relaxed.

Global economies started reopening as vaccines became available, though there remained significant supply chain issues, such as shortages of microchips, plastic resins, petrochemicals and other raw materials. As such, manufacturing activity began to rebound during the second year of the pandemic (2021), resulting in a higher demand for energy.

Although manufacturing activity began to recover in 2021, it remained below pre-pandemic levels. In 2021, real sales were 6.2% lower and energy consumption was 3.7% lower compared with 2019.

Paper and primary metal are the top energy consumers

In 2021, the top energy consumers were paper (548.9 PJ) and primary metal manufacturers (487.8 PJ) which, together, accounted for almost half (49.1%) of all energy consumed by the manufacturing sector.

Petroleum and coal products (290.9 PJ) and chemical manufacturing (263.4 PJ) accounted for 26.3% of energy consumption.

The consumption of energy in the manufacturing industries does not necessarily reflect sales volumes. Despite making up close to half of all energy consumed, paper manufacturing and primary metal manufacturing accounted for just over 1/10 (11.3%) of the total real sales of goods manufactured (shipments) in 2021.

The largest increase in energy consumption occurred in primary metal, which consumed an additional 38.1 PJ (+8.5%) in 2021. Rising demand for iron, steel and aluminum—and lower production in China—contributed to an increase in production and energy consumption by this manufacturing industry.

Energy consumption in petroleum and coal products manufacturing increased by 16.5 PJ (6.0%). Higher global demand for petroleum and higher exports of energy products contributed to increased energy consumption in 2021.

Paper manufacturing, the largest consumer of energy, consumed an additional 5.7 PJ (+1.1%) in 2021 compared with 2020. Economic factors, such as decreasing demand for newsprint and increasing costs of operations, resulted in some mills closing indefinitely in 2020.

Energy consumption in miscellaneous manufacturing increased by 0.3 PJ (+6.1%) in 2021. This industry includes businesses that produce medical equipment and supplies, including personal protective equipment (which were required during the pandemic to prevent the spread of covid).

One predictable outlier is the transportation equipment manufacturing industry, whose energy consumption declined 7.4% in 2021 following a drop of 18.0% in 2020. In 2021, real sales dropped by 8.4%, led by declines in motor vehicle and aerospace product and parts.

Travel restrictions and supply issues—such as the global semiconductor chip shortage—continued to affect the transportation industry during the second year of the pandemic.

Temporary shutdowns and ramping down of production occurred throughout the year at auto assembly plants and, as a result, many auto part manufacturers reduced their production.

Natural gas and electricity are the largest sources

Natural gas and electricity are used in all manufacturing industries. In 2021, 659.3 PJ of natural gas was consumed, accounting for almost 1/3 (31.3%) of the total energy used by the manufacturing sector.

The largest consumers of natural gas were chemical manufacturing (156.5 PJ) and primary metal manufacturing (116.6 PJ) which, combined, accounted for 41.4% of the total natural gas consumed.

Electricity accounted for 631.6 PJ or 29.9% of total energy consumed by the manufacturing sector. The primary metal industry (256.2 PJ) and the paper manufacturing industry (121.8 PJ) were the largest electricity consumers, accounting for 59.9% of total electricity consumed.

Spent pulping liquor* was consumed solely by the paper manufacturing industry and accounted for 10.7% (225.4 PJ) of the total energy consumed.

Coals and cokes (196 PJ) accounted for 9.3% of the total energy consumed. Primary metal, petroleum and coal products and non-metallic mineral product manufacturing were the primary users of coals and cokes.

Wood (185.7 PJ) accounted for 8.8% and was primarily used by the wood product and paper manufacturing industries.

Refinery fuel gas (133.6 PJ)—mainly consumed by the petroleum and coal products manufacturing industry—made up 6.3%, and all other energy sources combined accounted for the remaining 3.7% of total energy consumed.

* According to Wikipedia, pulping/black liquor is the by-product from the kraft process when digesting pulpwood into paper pulp. Mills have used this liquor as an energy source since at least the 1930s, usually using boilers to recover and burn much of the black liquor they produce, generating steam and recovering the cooking chemicals. This has helped paper mills reduce problems with water emissions and their use of chemicals, and produce some of their own electricity onsite.