Canada proposes 35% emissions cap on oil and gas sector by 2030

The Canadian government has introduced draft regulations to cap oil and gas sector emissions 35% below 2019 levels by 2030, sparking backlash from industry leaders who argue it could lead to reduced production. 

Environment Minister Steven Guilbeault emphasized the cap targets pollution, urging companies to use their record profits from 2022, which totalled C$66.6 billion, for decarbonization.

The regulations propose a cap-and-trade system rewarding low-emission producers and imposing penalties on those failing to comply, with reporting starting in 2026 and the first compliance period from 2030-2032. 

Most emission cuts are expected from reduced methane emissions and a carbon capture project for oil sands. While Ottawa predicts a minor 0.1% GDP impact, Alberta claims the cap could cut production by a million barrels per day by 2030.

Opposition Conservatives labelled the cap a threat to Canada’s energy sector and vowed to repeal it if elected. Meanwhile, environmental advocates are calling for earlier implementation to meet the 40-45% national reduction goal by 2030. Formal consultations on the proposal will run from November 9 to January 8, with final regulations expected in 2025.