The Canadian city of Vancouver is building new district heating systems and converting existing systems to run on low-carbon fuel sources, resulting in significant CO2 reductions.

The Vancouver Neighbourhood Energy Strategy is rolling out low-carbon district heating and cooling systems in high-density areas of the city. The strategy serves the dual purpose of converting existing fossil fuel-based district heating systems to run on low-carbon fuel sources, such as wood chips, and building new district heating systems to serve both new developments and existing buildings. With three new systems operational, two new systems on the way, and an additional two low-carbon conversions of existing systems to be completed in 2020, the Neighbourhood Energy Strategy aims to reduce city-wide carbon pollution by 11%, which is a third of the city’s overall climate reduction target.

120,000 tonnes of CO2 reduced every year from NES projects by 2020

Cities100 – 2015

To facilitate the roll out of low-carbon district heating, Vancouver has created a competitive selection process involving relevant utilities and use of franchise agreements to leverage private sector expertise and financing. This approach includes the use of a number of different enabling policy tools, and results in minimal financial exposure and risk to the city government. Vancouver has taken the unusual step of openly sharing its information with other cities, including consultant studies, financial models, building standards, and franchise agreement contracts.

The challenge

Energy used for space heating of buildings generates more than 50% of the CO2 emissions in Vancouver. The Neighbourhood Energy Strategy provides a cost-effective solution to significantly reduce these emissions. In order to compete with very low-cost fossil fuels, the city has established a number of enabling policies for district heating to be more cost-effective and competitive.


Economic The Neighbourhood Energy Strategy projects generate employment activity stemming from $173.6 million in construction investments as well as ongoing operations.

Environmental The district heating projects tap waste heat from sewers, data centers, and solid waste residues that would not otherwise be available to individual buildings, thereby making more efficient use of resources.

Health The roll out of district heating in Vancouver results in less combustion of fossil fuels for heating, improves local air quality, and reduces the potential for respiratory illness for residents.

Social Customers connected to low-carbon district heating benefit from much more stable and predictable energy costs as a result of using local renewable energy sources rather than depending solely on fossil fuels.

About Vancouver

Vancouver is a coastal seaport city in Canada. As the most populous city in the province, the 2016 census recorded 631,486 people in the city. Vancouver has the highest population density in Canada with over 5,400 people per square kilometre. Vancouver is classed as a Beta global city. Vancouver is consistently named as one of the top five worldwide cities for livability and quality of life, and the Economist Intelligence Unit acknowledged it as the first city ranked among the top-ten of the world’s most well-living cities for five consecutive years. While forestry remains its largest industry, Vancouver is well known as an urban centre surrounded by nature, making tourism its second-largest industry.

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