Canada is planning on publishing an update on its proposed emissions cap as soon as October, as said by Environment Minister Steven Guilbeault in an interview. The Canadian government will unveil its proposal to cap oil and gas emissions in October that will “definitely” be released before a United Nations climate conference in Dubai which starts on November 30th, according to Mr Guilbeault.
Back in August 2022, the government suggested a new measure to help the fight against climate change – an industry-specific cap and trade system or a modified carbon pricing system that sets a ceiling for the emissions allowed for companies to release.
It aims to fulfill the country’s goal of reducing greenhouse gass emissions by 42% by 2030 compared to 2019 levels (or 31% below 2005 levels). The cap wants to limit emissions but is not aimed to be seen as a restriction on oil and gas production. Its goal is to maximize opportunities to invest in decarbonizing the sector while also managing competitiveness challenges in one of Canada’s largest sectors and minimizing carbon leakage risks.
Canada’s Environment Minister shared that the government has had productive conversations with energy companies and he believes they will get to a mutually acceptable plan.
“It’s no secret, generally speaking, that industry isn’t particularly fond of government coming up with new regulations… But I think by and large, industry understands that we need to tackle emissions, that the world is de-carbonizing whether they like it or not, and they can either be part of the solution or the solution will be imposed upon them,” said Guilbeault, speaking by phone from China, where he is participating in environmental talks.
So far there has been a strong oposition from the oil and gas sector to the emissions cap, claiming it must be realistic, based on consultations about what is feasible and that generally, the sector will not accept policies that would drive production cuts and job losses.
The industry’s response to the new policy will depend on the details of Guilbeault’s proposal, about to be published in October this year. The draft regulations were initially about to be unveiled in the spring, however, they have been delayed due to the opposition from the industry on imposing production cuts.