Canada proposes a sharp reduction in emissions from the oil and gas industry by 2030

On Monday, the Canadian government released draft regulations which would cap greenhouse gas emissions from the oil and natural gas sector. Producers will be required to reduce emissions by 35% from 2019 levels and 2030.

In a press release, the Environment Ministry said that the regulations would create a cap and trade system to reward companies with better performance. It will also provide an incentive for polluting firms to improve their production processes.

Ottawa stated that oil and gas production would still grow by 16% in 2030-2032 compared to 2019 levels, but without a cap. The Canadian GDP will only decrease by 0.1%.

The government stated in a press release that the proposed regulations limit pollution but not production. They are designed to be technically feasible within the industry while still allowing for continued production growth.

Oil and gas is responsible for almost a third (33%) of Canada's total emissions. It's the most polluting industry in Canada. Meanwhile, other sectors, such as electricity, have been decarbonizing.

The Liberal government of Justin Trudeau had previously stated that it wanted to see the oil and gas sector reduce emissions up to 38% by 2030 compared to 2019 levels.

Climate advocates say that the oil and gas sector needs to decarbonize more quickly if Canada wants to reach its climate targets for 2030. However, senior government officials have stated that other sectors could make significant reductions.

Energy industry and oil producing provinces oppose the cap. They argue that the regulations will in fact kill jobs and reduce tax revenue in Canada.

Goldy Hyder said that imposing a cap on oil and gas emissions will only make Canadians even poorer at a time when the economy of Canada is stagnant.

Consultations on the new regulations will take place from 9 November until 8 January next year. The final version of the regulation will be published by 2025. The final version will be published in 2025.

(source: Reuters)