The Canadian federal government has proposed lifting an emissions cap on the oil industry, but only if the industry promises to find other ways to reduce its emissions in line with 2030 and further targets.
Per a Reuters report citing unnamed sources in the know, Alberta’s government will also have to make an emission reduction promise if it wants the emissions cap lifted on its key industry. Prime Minister Mark Carney was in discussions about the cap with oil industry executives, the Reuters sources said.
The oil and gas sector is the source of the biggest chunk of Canada’s emissions, accounting for 28% of the total based on 2021 numbers. The federal government’s plan, first released at the end of last year by Carney’s predecessor, Justin Trudeau, calls for a reduction in emissions from 171 million tons in 2019 to between 106 and 112 million tons by 2030.
The oil industry reacted to the idea as one might expect, slamming it as a cap on oil production, essentially preventing the Canadian oil industry from growing beyond a certain level. At a House of Commons hearing a year ago, top executives from the oil sands said the cap would be unproductive and redundant.
“The world will not consume one less barrel of oil simply because Canada chooses not to provide it. That barrel will come from somewhere else,” Suncor chief executive Rich Kruger said at the hearing. Imperial Oil’s CEO noted the presence of other “vehicles and requirements” put in place to curb emissions of carbon dioxide in the country.
The cap is scheduled to go into effect from 2030, but if Carney’s new idea gains traction, it might end up in the trash, to be replaced by a “climate competitiveness strategy”, which the Carney government is set to announce later this year, according to the Reuters sources.
By Irina Slav for Oilprice.com
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