Oil and gas sector greenhouse gas pollution cap

The oil and gas sector is a major contributor to Canada's economy. It is also Canada's largest source of greenhouse gas (GHG) emissions. The sector has a critical role to play in meeting the country's climate objectives, like every sector working to cut pollution. The proposed oil and gas GHG pollution cap is a regulatory tool, supported by a suite of Government of Canada policies. These policies will help ensure the oil and gas sector does its fair share to reduce GHG pollution, while creating new jobs in Canada.

Canada has committed to cap and reduce GHG emissions from the oil and gas sector at a pace and scale necessary to contribute to Canada’s climate goals, in a way that allows the sector to compete in the emerging global clean economy.

Overview

In December 2023, Environment and Climate Change Canada published a Regulatory Framework for an Oil and Gas Sector Greenhouse Gas Emissions Cap, which confirmed the government’s intent to implement the oil and gas GHG pollution cap through a new cap-and-trade system, and proposed various design features including subsectors covered by the emissions cap, the level of the emissions cap, and rules about flexible compliance options. The feedback received on the regulatory framework was considered in developing the proposed oil and gas GHG pollution cap.

On November 4, 2024, the Government of Canada announced the proposed Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations. To read the full news release consult Canada releases draft regulations to cap pollution, drive innovation and create jobs in the oil and gas industry. For more information, consult the Oil and gas greenhouse gas pollution cap – Backgrounder to CGI Regulations.

On the same day, the Quantification methods for the Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations (draft for consultation) (Quantification methods) document was published. The draft Quantification methods describe how facilities must quantify greenhouse gas emissions and production.

The oil and gas GHG pollution cap will put a limit on GHG pollution, not oil and gas production. It will help ensure the sector invests in technically achievable decarbonization to be a low emissions source of oil and gas. As the global market shifts to lower-carbon sources of energy, fuels extracted with the least amount of pollution will be in highest demand.

At a time when oil and gas companies are reaching record profits, the oil and gas GHG pollution cap will stimulate the kinds of investment needed to innovate and build a strong, thriving economy that works for everyone.

Transcript

The oil and gas sector is a very important part of our economy.

But it’s also our largest source of greenhouse gas emissions.

Today, we have released draft regulations to cap pollution from oil and gas.

These new regulations will hold big polluters accountable for their emissions.

Because the cap is on pollution, not production, it will encourage the industry to invest in projects that lower emissions, enabling cleaner, more efficient production and put them on the path to become a supplier of choice for low-carbon produced fossil fuels, around the world.

All while creating new clean tech jobs.

It’s good for the economy, it’s good for jobs, and it’s good for the environment.

Share your feedback

The comment period for the proposed Regulations and the draft Quantification Methods document closed on January 8, 2025. To learn more, please consult the following web page Consultation: proposed Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations.

Government of Canada GHG emissions reduction measures

The oil and gas GHG pollution cap is part of a broader suite of policies and investments designed to support decarbonization of the oil and gas sector. Some of the Government of Canada emissions reduction measures already under way include:

Previous announcements and documents

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Date modified:: 2025-01-08

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