Government of Canada to Develop Guidance for Best-in-Class New Oil and Gas Projects and Net-Zero Emissions Requirements by 2050

EIN Government of Canada Logo

April 12, 2022

As a major economic contributor to the country and Canada’s largest source of greenhouse gas emissions, the oil and gas sector has a critical role to play in meeting Canada’s climate objectives. To remain competitive in a global market that is moving away from fossil fuels combustion to address climate change and enhance energy security, new Canadian oil production subject to federal impact assessment will have to meet even higher standards. New projects would have to deliver emissions performance—the amount of greenhouse gas pollution it takes to produce a barrel of oil or cubic metre of natural gas—that is best in class, and all future oil and gas projects would have to be net zero by 2050.

The Minister of Environment and Climate Change, Steven Guilbeault, announced plans to develop guidance that will require proponents of new oil and gas production projects subject to a federal impact assessment to demonstrate that they will have “best-in-class” low-emissions performance.

With some global demand for oil and gas expected even once the global economy reaches net-zero emissions, now is the right time to transform Canada into the cleanest global oil and gas producer. Moving to provide low-carbon and non-emitting energy products and services will help ensure economic competitiveness and prosperity, and create good, sustainable jobs for Canadians.

The new guidance will explain how proponents of new oil and gas projects subject to a federal impact assessment should use the analysis required by the Government of Canada’s strategic assessment of climate change (SACC) to demonstrate that the project will be “best in class,” such as by:

  • demonstrating that the project will integrate advanced technologies and best environmental practices (BEPs), including emerging technologies, to minimize emissions;
  • comparing the project’s emissions with high-performing projects in the world; and
  • developing a plan to achieve net-zero emissions by 2050 if the project will continue to operate after that date.

The new guidance will also include information about how a proposed project is consistent with the overall economic transition to a low carbon-economy, including considerations such as how the project will remain competitive across global low-carbon transition and net-zero scenarios, and how it avoids supporting activities and assets that are at risk of becoming stranded from declining demand.

The development of the guidance will be informed by consultations with industry, provinces, territories, Indigenous Peoples, and other stakeholders.

Carbon competitiveness

As the world acts on climate change and the global supply of fossil fuels becomes cleaner, Canada’s oil sector will need to continue to drive down emissions and costs to remain competitive. Federal measures outlined in the 2030 Emissions Reduction Plan will ensure that Canadian oil and gas production becomes less emissions intensive (i.e. fewer emissions per barrel) over the next decade. While the actual trajectory to 2030 will unlikely be a straight line, and the global average is also unlikely to remain static, reducing the carbon intensity of Canadian production below the global average is both possible and likely to be increasingly important in order for Canadian industry to compete in an increasingly constrained global market.

Quick facts:

  • The oil and gas sector is Canada’s largest source of greenhouse gas emissions. In 2019, it accounted for 26 percent of the country’s emissions.
  • On March 29, the Government of Canada published the 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy. The plan includes a projected contribution from the oil and gas sector of emissions reductions to 31 percent below 2005 levels in 2030 (or to 42 percent below 2019 levels). This commitment is a guidepost for action, and will guide the Government of Canada’s work with industry, stakeholders, provinces and territories, Indigenous Peoples, and others to develop the cap on oil and gas sector emissions.
  • Canada is positioning our industries to be green and competitive. The Government of Canada will introduce a tax credit to incentivize the development and adoption of carbon capture, utilization and storage (CCUS) technologies for a range of sectors.
  • The International Energy Agency has demonstrated that in a net-zero world by 2050, oil consumption will go from roughly ninety million barrels per day to around twenty-four million.
  • Last fall, the Government of Canada committed to cap oil and gas emissions at a pace and scale needed to achieve net zero by 2050. Projects approved under the Impact Assessment Act will need to fit in and comply with the cap once it is in place.

Source

Related Articles


Latest Articles


Changing Scene

  • Federal Government Invests $1.2B to Build 84,500 EV Chargers by 2027

    Federal Government Invests $1.2B to Build 84,500 EV Chargers by 2027

    From mining, to manufacturing, to charging, Canadian businesses and workers are attracting historic investments in the electric vehicle (EV) supply chain. When electric vehicles are made from Canadian minerals, assembled by Canadian auto workers, and powered at Canadian-made chargers, we secure and create jobs, grow our economy, and keep our air clean now and into the future. Read More…

  • Applications Open for Nova Scotia Power’s 2023 Scholarship and Bursary Program 

    Applications Open for Nova Scotia Power’s 2023 Scholarship and Bursary Program 

    Applications are now open for Nova Scotia Power’s 2023 Scholarship and Bursary Program, and Nova Scotian students are encouraged to apply. The program is accepting applications until April 19, 2023. As part of its Diversity, Equity and Inclusion strategy, Nova Scotia Power is focused on supporting programs and initiatives that help remove barriers, advance DE&I education and awareness in Nova Scotian communities. Read More…

  • BCUC Approves Deferral Account for FortisBC’s Electric Vehicle Workplace and Fleet Charging Funding Program

    BCUC Approves Deferral Account for FortisBC’s Electric Vehicle Workplace and Fleet Charging Funding Program

    Recently, the British Columbia Utilities Commission (BCUC) approved FortisBC Inc.’s (FBC) application for a new deferral account to enable funding to organizations for the purchase and installation of Electric Vehicle (EV) charging infrastructure. Through FBC’s EV Workplace and Fleet Charging Funding Program, eligible organizations can request a one-time FBC funded contribution of $1,920 per Level 2 EV Charger, capped at seven chargers per site. Read More…

  • Parliamentary Secretary Julie Dabrusin Announces New EV Chargers in B.C. and New Single Window for ZEV Infrastructure Applications

    Parliamentary Secretary Julie Dabrusin Announces New EV Chargers in B.C. and New Single Window for ZEV Infrastructure Applications

    Reducing pollution from the transportation sector is critical to Canada achieving its climate targets. That’s why the Government of Canada is making it more affordable for Canadians to purchase, charge and drive electric vehicles (EV) across the country. Recently, Julie Dabrusin, Parliamentary Secretary to the Minister of Natural Resources and to the Minister of Environment and Climate Change, on behalf of the Honourable Jonathan Wilkinson, Minister of Natural Resources, launched a new, integrated, federal zero-emission vehicles (ZEV) infrastructure landing page. Read More…