Decarbonizing pathways for Canada’s industrial sector

Industrial off-road equipment is a major but often overlooked contributor to greenhouse gas emissions. These machines operate intensively within industrial facilities, often relying on fossil fuels for continuous, high-demand workloads. 

ECCC needed to understand what realistic pathways existed to decarbonize this equipment fleet by 2050. This meant answering difficult questions:  

• How do emerging low-carbon alternatives compare in terms of costs and emissions performance?  

• What infrastructure, such as electricity supply, on-site power generation or hydrogen refueling, would be required to make large-scale adoption feasible?  

• What market barriers might stand in the way of adoption, from limited equipment availability to gaps in charging and refueling networks? 

Without this analysis, Canada risked underestimating the scale of change required and missing the opportunity to align industrial competitiveness with climate leadership. 

Working closely with ECCC technical advisors, we began by identifying and prioritizing categories of off-road equipment across industrial sectors. Each category was analyzed for its power source, size, operational characteristics and utilization profile, which together formed the basis for a robust equipment matrix. 

From there, the team assessed the availability and viability of low-carbon and net-zero alternatives worldwide, developing detailed cost comparisons and infrastructure requirements. This included modelling electricity demand, on-site power generation, and the scale of hydrogen production, storage and transport systems that would be needed to support decarbonization. 

The analysis revealed several key findings. Electrification emerged as the most dominant pathway, with battery-electric models already accounting for the majority of low-carbon deployments in equipment such as forklifts, welders and surface machines. These solutions achieve zero-emission operation while also delivering operational cost savings and regulatory compliance benefits. In applications where continuous runtime is required and charging networks are underdeveloped, hybrids offered a pragmatic bridge, delivering 20–40 percent reductions in fuel consumption and CO₂ emissions. 

Hydrogen technologies were found to be promising but at an earlier stage of adoption. Pilot projects are underway in high-power segments such as railway maintenance, heavy-load terminal tractors and snow groomers, where fast refueling and extended range are critical. However, the study underscored that hydrogen’s future depends heavily on new production, storage and refueling infrastructure, which currently lags behind demand. 

The role of smart systems, such as IoT telematics, predictive maintenance and regenerative energy recovery, was also highlighted as an important enabler, reducing energy use and extending the lifespan of both electric and hybrid equipment. Across all findings, it became clear that original equipment manufacturers (OEMs) are prioritizing electric-first designs, with hybrids serving as transitional solutions and hydrogen remaining experimental but strategically important.

The report provided comprehensive analyses of industrial equipment decarbonization, reframing decarbonization as a strategic opportunity. With the potential investment anticipated in low-carbon equipment and supporting infrastructure over the coming decades, Canada has the chance to lead in emerging clean technology markets while meeting its climate goals. By delivering clear, evidence-based pathways, the project equips ECCC, industry leaders and investors with the tools to accelerate the shift toward a net-zero future in one of Canada’s most challenging yet impactful industrial domains.

Our in-depth analysis has given ECCC and its partners a practical roadmap for moving industrial off-road equipment toward net-zero emissions, showing exactly how new technologies, from battery-electric models to smart IoT-enabled systems, can deliver impressive results.

ECCC now has the evidence and tools needed to make informed, future-ready decisions about decarbonizing this vital yet often overlooked sector, equipping them to back policy recommendations with confidence and target investments toward solutions proven to cut emissions and operating costs.