Federal government launches next steps to develop oil and gas emissions cap

The federal government launched consultations on a key commitment in a plan to cap and cut emissions from the oil and gas sector today.

The government says its goal is to lower emissions at a pace and scale needed to achieve net-zero emissions by 2050, make a meaningful contribution toward Canada’s 2030 emission reduction target and support investments in clean technologies to decarbonize the sector and create jobs.

“Establishing a cap on oil and gas emissions is one of the key commitments of our Government’s Emissions Reduction Plan. Canada’s oil and gas companies have proven repeatedly that they can innovate and develop new technologies and more competitive business models,” said Steven Guilbeault, Minister of Environment and Climate Change, in a statement. “True global energy security and affordability can only come with reduced emissions. With this cap, we will work with industry, provinces, Indigenous groups, civil society, and others to take action on drawing down the emissions from oil and gas production.”

The discussion paper released today outlines two options to establish the cap:

• A cap-and-trade system under the Canadian Environmental Protection Act that sets regulated limits on emissions from the sector
• Modify the carbon pricing benchmark requirements for heavy emitters to create price-driven incentives to reduce emissions to levels corresponding to the cap

The government says it expects to outline the design of the oil and gas emissions cap early next year.