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.
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:
- Carbon pollution pricing
- Methane Regulations
- Clean Fuel Regulations
- Carbon Capture, Utilisation, and Storage (CCUS) Investment Tax Credit (ITC)
- Emissions Reduction Fund
- Clean Growth Program
- Draft Best in Class Guidance for new oil and gas projects subject to a federal review
Previous announcements and documents
- December 7, 2023
- Canada introduces framework to cap greenhouse gas pollution from oil and gas sector
- Regulatory Framework for an Oil and Gas Sector Greenhouse Gas Emissions Cap
- Backgrounder: Canada’s Regulatory Framework for an Oil and Gas Sector Greenhouse Gas Emissions Cap
- Roadmap for the Decarbonization of Canada's Oil and Gas Sector
- July 18, 2022
- April 6, 2022
- March 29, 2022
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