The new government’s Climate Competitiveness Strategy, outlined in Budget 2025, will prioritize effective carbon markets, enhanced methane regulations, and technologies such as carbon capture and storage as the primary means to reduce oil and gas emissions.Canada’s federal government is signaling it plans to scrap the previous cabinet’s controversial emissions cap plan, which had put former PM Justin Trudeau on a collision course with the provincial government of oil-producing Alberta.
The former government of Justin Trudeau last year proposed regulations to set a cap on greenhouse gas pollution within the oil and gas sector and have companies reduce emissions by 35% compared to 2019 levels.
Alberta and its oil and gas industry have argued that the emissions cap is basically a cap on oil and gas production as companies are required to either invest a lot of money to make production cleaner, or simply cut production to comply with the emissions cap.
“This cap is not actually about emissions. This is about the federal government wanting to cut oil and gas production and control our energy sector, even if it costs thousands of jobs and hurts Canadians from coast to coast,” Rebecca Schulz, Alberta’s Minister of Environment and Protected Areas, said last year.
Now Mark Carney’s new federal government has introduced an update on the Oil and Gas Emissions Cap in the just-unveiled budget 2025 plan, saying that it would prioritize the creation of effective carbon markets.
The new government’s Climate Competitiveness Strategy in Budget 2025 acknowledges the need to reduce emissions from the oil and gas sector to ensure Canada has access to markets that prioritize sustainability.
Carney’s climate strategy is “based on driving investment, not on prohibitions, and on results, not objectives,” the plan says.
“Effective carbon markets, enhanced oil and gas methane regulations, and the deployment at scale of technologies such as carbon capture and storage would create the circumstances whereby the oil and gas emissions cap would no longer be required as it would have marginal value in reducing emissions,” according to the budget plan.
By Michael Kern for Oilprice.com
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