Government Of Canada Releases Framework For An Oil And Gas Sector Emissions Cap

The Government of Canada has published the long-awaited framework (the Framework) for an oil and gas sector emissions cap. If implemented, the proposed cap-and-trade system would limit 2030 emissions from covered sources in the sector to 20-23% below 2019 levels (or 35-38% below 2019 levels, without the use of compliance flexibility).

What you need to know

• Coverage. The cap-and-trade system would apply to emissions from certain oil and gas facilities, including liquified natural gas (LNG), conventional oil, offshore, oil sands, and natural gas production and processing facilities. Beginning in 2030, the cap would be in the range of 106 to 112 megatonnes (MT) of greenhouse gas (GHG) emissions (although the system would allow between 131 and 137 MT of emissions with the use of compliance flexibility). In contrast, 2019 emissions from covered sourced were 171 MT.