NorthAmOil: Canada requires emissions cuts of up to 38% for oil and gas sector

In an apparently unprecedented move, Canada will require its oil and gas sector to slash greenhouse gas (GHG) emissions by 35% to 38% below 2019 levels starting in 2030.

The government says it is a historic first for a major oil- or gas-producing country. Canada is the world’s fourth largest oil producer, much of it from the oil sands, which have higher emissions for crude production than other oil fields.

Canada’s environment minister, Steven Guilbeault, announced the cap in what the government is calling a draft framework on December 7 at the COP28 climate summit in Dubai.

Justin Trudeau’s Liberal government will implement a cap-and-trade system to reach the cuts. Trudeau has a goal of Canada reaching net zero emissions by 2050.

The oil-and-gas sector accounts for around 28% of Canada’s GHG emissions, according to the Ottawa government. The transport sector only emits some 22%.

The system will set a legal limit on the oil and gas sector’s emissions, allowing companies to buy and sell a limited amount of emissions allowances or permits. Companies that cut emissions will be able to sell more permits, which Trudeau’s government says will reward innovation.