Canada will require its fossil fuel industry to cut emissions by 35% to 38% below 2019 levels from 2030, it was announced on Thursday.
Prime Minister Justin Trudeau’s government plans to limit emissions from the oil and gas sector through a national cap-and-trade system, which he first proposed in his 2021 election campaign, according to the policy announcement.
“Every sector of Canada’s economy must do its part to combat climate change and build a safe, prosperous and healthy future for Canadians,” Canada’s Environment Minister Steven Guilbeault said in a statement from the COP28 UN climate conference in Dubai. He added: “All sectors of our economy must reduce their emissions, and that includes oil and gas companies.
The policy, which is part of Canada’s plan to achieve net-zero emissions by 2050, works by setting a cap on emissions and forcing companies that do not meet that benchmark to buy and trade emission allowances with other producers.
Under the newly introduced framework, facilities would be able to buy a limited number of carbon offset credits – which have faced questions about their effectiveness in reducing global warming emissions – or contribute to a decarbonisation fund.
The cap would cover all greenhouse gas emissions and apply to oil and gas companies, offshore installations and liquefied natural gas producers. Together they account for around 85% of the sector’s emissions, according to the policy paper.
The proposal was met with opposition from the premier of Alberta, Canada’s main fossil fuel producing province.
“We’ve been very clear that we’re opposed to any kind of arbitrary emissions cap, whether it’s on oil and gas emissions or whether it’s on methane,” Alberta Premier Danielle Smith said on Thursday. Smith announced her intention to challenge the policy and create a “constitutional shield” against the proposal.
“This proposed cap also undermines the unity of our country,” Smith said in a statement.
In response to Canada’s announcement of the cap framework, Keith Stewart, senior energy strategist for Greenpeace Canada, said: “This isn’t yet the ambitious emissions cap we need to put us on a path to the full, fast and fair phase-out of fossil fuels needed to avoid the worst impacts of climate change.”
The government promises to release draft regulations with industry input in mid-2024.
