Wednesday, February 21

Canada’s new climate roadmap will require oil and gas sector to slash emissions 42% by 2030


Oil and gas accounts for more than one-quarter of Canada’s total emissions

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The federal government says Canada’s oil and gas sector will have to cut emissions by 42 per cent below current levels by 2030 as part of the country’s new emissions strategy which drew mixed reviews from industry and environmental critics.

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Environment Minister Steven Guilbeault tabled Ottawa’s first comprehensive emissions reduction plan Tuesday morning in the House of Commons, with sector-by-sector targets aimed at slashing emissions overall by 40 per cent below 2005 levels by 2030 on the path to net-zero emissions by 2050.

A hard cap will be imposed on emissions from the oil and gas sector, once consultations are complete and work on the cap is finalized, to achieve an emissions budget of 42 per cent below 2019 levels — or a 31 per cent reduction below 2005 levels — by 2030.

Speaking at the Globe Forum sustainability conference in Vancouver Tuesday, Prime Minister Justin Trudeau called on oil and gas companies to use record profits from surging prices to reduce the carbon intensity of their operations.

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“If there’s any oil and gas sector in the world that can do it, it’s Canada,” Trudeau said.

“Industries are already pushing forward on their own. And yes, the money is there too. With record profits, this is the moment for the oil and gas sector to invest in the sustainable future that will be good for business, good for communities and good for our future,” Trudeau said.

“Big oil lobbyists have had their time on the field. Now, it’s over to the workers and engineers who will build solutions.”

Canada produced 730 million tonnes of carbon dioxide, or its equivalent in other greenhouse gases such as methane and nitrous oxide in 2019. Under the new emissions plan, Canada needs to reach 443 million tonnes in 2030 to hit its target.

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The report projects that emissions from the oil and gas sector — including production, refining and transportation via pipelines — could drop to 110 million tonnes by 2030, down from 191 million tonnes in 2019.

The emission cuts promised for the oil and gas sector would be driven by carbon pricing policies and incentives for carbon capture, utilization and storage (CCUS) technologies; as well as greater use of solvents in oil sands extraction, stringent methane regulations, fuel switching and electrification.

Reaction from the oil patch was mostly positive Tuesday. Industry proponents said projections advanced under the plan acknowledged global demand for Canadian oil and gas will continue for decades.

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“What I liked about this was they were looking for the items they could do now,” said Tristan Goodman, president of the Explorers and Producers Association of Canada, which represents small- and mid-sized oil and gas producers.

“They’re looking for items that are economic and that are tested, while they continue to explore the mid-term or the long-term applications of things like hydrogen, which has long-term potential but is difficult today to get moving on. “

While many critics felt the emission targets for oil and gas were too lenient, others pointed out that the oil and gas sector will shoulder significantly more onerous emissions targets than the transportation sector which produces a similar share of Canada’s emissions.

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Oil and gas account for more than one-quarter of Canada’s total emissions. Transportation accounts for 25 per cent of total emissions, but the sector has been targeted for just a 10 per cent reduction below 2005 levels by 2030.

The plan announced Tuesday includes $9 billion in new spending mostly to expand existing climate action grants and loan programs, including another $1.7 billion for electric vehicle rebates. More details on the new spending — including an investment tax credit for CCUS — is expected when the federal budget is tabled in April.

The plan also lays out ambitious Canadian sales targets for electric vehicles.

One in five new personal vehicles sold in Canada will be zero emission by 2026. “Because if you want to make the switch and you go to the dealership, you shouldn’t have to be on a waitlist,” Trudeau said Tuesday.

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By 2030, at least 60 per cent of all new personal vehicles sold will be zero emission, rising to a target of 100 per cent of all personal vehicles sold by 2035.

The emissions reduction plan is a legal requirement for the government under the net-zero accountability law the Liberals passed in 2021. Under the law, Ottawa must produce regular progress reports and new national emissions targets every five years between 2030 and 2050.

More details about the potential scope of a cap on oil and gas emissions are expected later this spring.

With files from the Canadian Press

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