Environmental Spending by Businesses on the rise for 2013

GLOBE-Net, January 15, 2013 – Businesses operating in Canada spent $9.5 billion in 2010 to protect the environment, up 9% from 2008 according to the latest Statistics Canada report on Environmental Spending by businesses.

Pollution abatement and control processes and waste management and sewerage services were the two dominant expenditure categories, accounting for just over half of the total amount spent on environmental protection in 2010 ($2.7 billion and $2.1 billion, respectively).

The oil and gas extraction industry spent more on environmental protection than any other industry surveyed, followed by the electric power generation, transmission and distribution industry, accounting for 42% and 12% of the total for 2010 respectively.

[stextbox id=”custom” float=”true” width=”200″ bcolor=”add3d5″ bgcolor=”add3d5″ image=”null”]In keeping with a long-standing trend, the largest share of environmental expenditures by Canadian businesses was spent to deal with pollutants after they were created.[/stextbox]

Of the $4.2 billion in capital expenditures made for environmental protection, the majority was for pollution abatement and control (35%) followed by pollution prevention (26%).

Provincially, businesses in Alberta spent the most in capital to protect the environment ($2.0 billion) followed by British Columbia ($496 million). The large investments in Alberta are mainly due to high expenditures made by the oil and gas extraction industry.

Very large businesses (those with 1000 or more employees), accounted for 1% of all businesses in the survey population, but represented 32% of the total environmental protection expenditures in 2010.

Medium-size businesses, those with 100 to 499 employees, made up 75% of the population but accounted for 37% of the total environmental protection expenditures.

Capital Spending Rises

After slightly reduced spending in 2008 compared to 2006, businesses increased their investment in environmental protection, reporting $4.2 billion in capital expenditures for environmental protection in 2010.

This was an increase of 10% from 2008 and 9% from 2006 2 (See Chart). The largest share of environmental protection capital investments were for pollution abatement and control (35%) followed by pollution prevention (26%). These two activities also received the largest share of investments in 2008 and 2006.

Despite the increase in capital investment for pollution prevention technologies in 2010, the amount spent was less than the $1.6 billion businesses spent in 2006. The higher investments in 2006 may have been in anticipation of regulations increasing restrictions on sulphur levels in diesel fuels.

With the exception of pollution abatement and control activities, investments in all other environmental protection activities increased from 2008 to 2010. Investment in waste management and sewerage services showed the largest increase – up $139 million – driven primarily by the oil and gas extraction industry.

Operating Spending Also Rising

Operating expenditures for environmental protection totaled $5.3 billion in 2010, up 8% from 2008. The majority of these expenditures were directed towards waste management and sewerage services ($1.6 billion) followed by pollution abatement and control processes ($1.2 billion).

The oil and gas extraction industry had the highest operating expenditures for environmental protection in 2010, reporting over half a billion in expenditures each for site reclamation and decommissioning and for pollution prevention processes. Provincially, Alberta had the highest operating expenditures for environmental protection followed by Ontario ($2.1 billion and $1.1 billion respectively).

With the exception of pollution abatement and control activities, investments in all other environmental protection activities increased from 2008 to 2010. Investment in waste management and sewerage services showed the largest increase – up $139 million – driven primarily by the oil and gas extraction industry.

Investments in environmental protection by the oil and gas extraction industry totaled $2.0 billion in 2010, an increase of 23% from 2008. Businesses in this industry increased their investments in waste management and sewerage, reclamation and decommissioning and pollution prevention activities.

The petroleum and coal products manufacturing industry also reported increased investments in environmental protection activities for 2010. This industry directed most of its investments to pollution prevention activities (48%).

Renewable Energy Spending

In 2010, businesses were asked for the first time to report their capital investment in renewable energy technologies. Unlike investments for environmental protection, which are restricted to spending made in response to current or anticipated regulations, these investments include all investment made for renewable energy technologies regardless of whether it was made in response to an environmental regulation or not.

Businesses spent $455 million in capital for renewable energy technologies in 2010. Investment was highest in biomass energy technologies which accounted for over three quarters of the total.

Pollution Prevention

In 2010, companies were asked to report their operating expenses on pollution prevention and pollution abatement and control by environmental medium. The largest share of operating expenditures went towards the operation or maintenance of equipment to prevent or reduce emissions to air, followed by emissions to water (46% and 41% of the total, respectively).

In 2010, 58% of businesses in Canada reported that they used at least one pollution prevention method. The top three most commonly used methods were: good operating practices or pollution prevention training; recirculation, on-site recycling, reuse or recovery of materials; and prevention of leaks and spills.

The Statistics Canada report presents estimates from the Survey of Environmental Protection Expenditures (SEPE), 2010, a measure of the expenditures made by Canadian industry to comply with present or anticipated environmental regulations, conventions and voluntary agreements.

Full details, charts and data tables on the Statistics Canada Report are available here.