Ottawa orders emissions cuts of up to 38% for oil and gas companies

financialpost.com:

Canada will require its oil and gas industry to cut emissions to 35 per cent to 38 per cent below 2019 levels in six years in what the government is calling a historic first for a major fossil-fuel producing country.

Environment Minister Steven Guilbeault announced the long-promised oil and gas emissions cap Dec. 7 at the COP28 summit in Dubai, a policy likely to inflame tensions with conservative leaders of western provinces that are home to the bulk of the industry.

Prime Minister Justin Trudeau’s government will implement a cap-and-trade system to achieve the cuts. It will set a legal limit on the sector’s emissions and then allow companies to buy and trade a limited number of emissions allowances or permits. Companies that reduce emissions will be able to sell more permits, thereby rewarding those who innovate to cut pollution.

“There is no future for this industry unless they decarbonize,” Guilbeault said.

There is no future for this industry unless they decarbonize

Producers will be allowed the flexibility to emit up to a level of about 20 per cent to 23 per cent below 2019 levels through the ability to buy carbon offsets or pay into a fund that promotes decarbonization in the sector if their emissions exceed the cap.

The cap will go down over time until Canada’s economy reaches net zero in 2050. Thursday’s announcement is a framework that lays out the plan, with more details to be released in draft regulations in the middle of next year, Guilbeault said. Those regulations will narrow down an exact emissions target for 2030, he said.

The Canadian Association of Energy Contractors said it rejects the cap, arguing it will hurt Canadian energy workers and the small and medium-sized businesses supporting them.

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