The feds have put another feather in their carbon-cutting cap.
What happened: The federal government is proposing new rules that would force oil and gas companies to cut their 2019 emissions levels by 35% by 2032. The idea is that laws and an accompanying cap-and-trade system are needed to get the sector to cut emissions faster.
- Per the Canadian Net-Zero Emissions Accountability Act, Canada must be carbon neutral by 2050. To get there, Canada has an initial goal of cutting emissions by 40% below 2005 levels by 2030.
Why it matters: The oil and gas sector is the country’s largest emitter, but it’s also one of the biggest economic drivers. As oil exports to the U.S. reach record highs, the feds and Alberta are debating whether the cap will force producers to cut outputs during a boon time.
- The feds say production could still increase under the cap if producers reduce methane leaks and invest in carbon capture. Alberta points to research that says otherwise, like a Deloitte report claiming the cap’s impossible without production cuts.
What’s next: The final regulations aren’t expected to come into force until the early spring, but that could be derailed if the Bloc Québécois ends up triggering an early election.—QH