Prime Minister Justin Trudeau’s government plans to unveil its proposal to limit oil and gas emissions this fall, a policy that will test Canada’s ability to meet its climate goals without limiting a crucial economic sector.
The draft regulations will be published as soon as October and will be published “definitely” ahead of a United Nations climate conference in Dubai starting on November 30, Environment Minister Steven Guilbeault said in an interview
The emissions cap, first promised in Trudeau’s 2021 election platform, aims to ensure Canada moves toward its climate commitments. But regulating emissions from the energy sector is sure to spark a fight with the conservative provincial government in Alberta, where most of Canada’s oil production is located.
The industry’s response to the cap will depend on the details of Guilbeault’s proposal. It initially intended to publish draft regulations in the spring, but they have been delayed as the government struggles with the balance of reducing emissions without imposing production cuts.
Last year, the environment minister published an emissions reduction plan that called for a 42% reduction in oil and gas emissions by 2030, a target that oil industry groups have argued is too restrictive However, Canadian officials have also said the 42% figure was a modeling exercise, and in practice the proportion of each sector’s emissions cuts in 2030 could look different.
Guilbeault said the government has had productive talks with energy companies and believes they will reach a mutually acceptable plan.
“It’s no secret, in general, that the industry doesn’t particularly like the government coming up with new regulations,” Guilbeault said, speaking by phone from China, where he is participating in environmental talks. “But I think industry generally understands that we have to address emissions, that the world is decarbonizing whether they like it or not, and they can be part of the solution or be forced into the solution.”
The Trudeau government is betting heavily on carbon capture and storage to meet its climate goals, pledging C$12.4 billion ($9.2 billion) in tax credits for the technology through the middle of the next decade.
The emissions cap regulations are expected as some fossil fuel companies, including Suncor Energy Inc., refocus on their core oil business and de-emphasize long-term renewable projects.
Guilbeault said the strongest opposition has come from a few provinces, though he declined to name them. A statement from Alberta Premier Danielle Smith this week left little doubt about her government’s position as she slammed “an emissions cap that will force energy companies to limit their oil and gas production “.
“We will strongly suggest that the federal government refrain from testing the resolve of our government or Albertans in this regard,” Smith said.
