Canada’s new climate plan calls for 42% cut in emissions from oil and gas sector

‘If there’s any oil and gas sector in the world that can do it, it’s Canada’s,’ Trudeau said in Vancouver today

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Prime Minister Justin Trudeau’s government wants a 42% reduction in emissions from the oil and gas sector as part of Canada’s plan to meet its 2030 emissions reduction goal.

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“If there’s any oil and gas sector in the world that can do it, it’s Canada’s,” Trudeau told a conference in Vancouver. “Big oil lobbyists have had their time on the field,” he added, saying it’s now up to workers and engineers to bring emissions down.

Trudeau’s plan promises to make a carbon-capture tax credit available to the industry by 2022, details of which will be released “soon.” It doesn’t however, include specifics on the emissions cap the government plans to impose on the fossil-fuel sector, which accounts for about a tenth of Canada’s total economic output.

The document, introduced Tuesday in parliament by Environment Minister Steven Guilbeault, promises an additional C$9.1 billion ($7.3 billion) in new spending to reach Canada’s climate targets. Overall, the government aims to reduce emissions more than 40% below 2005 levels by 2030.

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In an interview with Bloomberg earlier this month, Guilbeault said existing policies, including phasing out coal-fired electricity generation and adopting a national carbon tax, already have the country on track to reduce emissions by 36%.

Getting across the 40% threshold, he said, would require “a lot of heavy lifting.”

It won’t be cheap. The total spending — from both governments and businesses — needed over the next three decades to get Canada to net zero is C$2 trillion, according to a Royal Bank of Canada report last fall, which it said translates to at least C$60 billion a year in spending given current technologies.

Prime Minister Justin Trudeau (L) greets Minister of the Environment and Climate Change Steven Guilbeault at the GLOBE Forum 2022 in Vancouver, British Columbia, March 29, 2022.
Prime Minister Justin Trudeau (L) greets Minister of the Environment and Climate Change Steven Guilbeault at the GLOBE Forum 2022 in Vancouver, British Columbia, March 29, 2022. Photo by REUTERS/Jennifer Gauthier

Tuesday’s plan says the government is working to reduce oil and gas methane by at least 75% by 2030, and support clean technologies to further decarbonize the sector.

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It also introduces a tougher schedule to shift Canadian vehicle sales to electric models, promising a requirement that one in five new passenger vehicles be battery-operated within four years, and 60 per cent by the end of 2030.

The government will also aim for one-third of medium- and heavy-duty vehicles sold to be electric by 2030 and 100 per cent by 2040.

But the environment minister told The Canadian Press in an interview that it will take a little longer for transport to catch up to other sectors on cutting emissions. Transportation accounts for one-quarter of all emissions, and its carbon footprint has increased 16 per cent in the last 17 years.

The report says by 2030 the sector should be able to cut emissions 23 per cent from current levels.

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“We are making some progress between now and 2030,” Guilbeault said. “But there’ll be even more progress to come between 2030 and 2035.”

The Canada Infrastructure Bank will spend C$500 million on electric vehicle charging infrastructure, and the government will put forward an extra C$400 million towards building charging stations.

The coming federal budget is expected to expand that program to include used vehicles as well as more expensive models of electric vehicles so the new SUVs and pickup trucks coming onto the electric vehicle market will qualify.

Canada’s total greenhouse gas emissions in 2019 were 730 megatons of carbon dioxide equivalent. Oil and gas extraction represents about 26% of those emissions, and the government will be heavily relying on the carbon capture tax credit and the emissions cap to ensure the sector reaches its goals.

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On the emissions cap, the government said Tuesday a discussion paper will be published this spring, to be followed by consultations with provinces, Indigenous partners, industry and civil society. The government also said it doesn’t plan to use the cap to lower production that is “not driven by declines in global demand”

Trudeau pledged during last year’s election campaign his Liberals would force oil and gas companies to set five-year targets to cut their emissions with the aim of reaching net zero emissions by 2050. The program would be poised to begin in 2025. Part of this plan includes a C$2 billion fund to create green jobs in oil-producing regions.

Canada is the only country in the Group of Seven to see its harmful emissions actually rise between 2015 and 2019.

Trudeau has blamed his country’s record on emissions to date on the previous Conservative government, which in 2011 withdrew from the Kyoto protocol, a precursor to the 2015 Paris agreement. The prime minister also has said four years of climate skepticism in the US under Donald Trump also effectively held Canada back.

With additional reporting from The Canadian Press



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