Agreement in principle – Canada-Alberta methane equivalency agreement

In recognition of:

• The Canada-Alberta Memorandum of Understanding (MOU) to strengthen energy collaboration and build a stronger, more competitive, and more sustainable economy, which was signed on November 27, 2025
• That Memorandum’s commitment that Alberta and Canada would negotiate a methane equivalency agreement “with a 2035 target date and a 75% reduction target relative to 2014 emissions levels”
• Alberta’s comprehensive, performance-based methane emission reduction strategy, an approach that includes regulations, offset credits, and investments
• Alberta and Canada’s strong history of collaboration on methane equivalency agreements, demonstrated through successful agreements finalized in 2020 and 2025
• Canada’s leadership in regulating oil and gas methane beginning in 2018
• The Enhanced Methane Regulations Canada published in December 2025, which include a flexible, performance-based compliance pathway. These outcome-focused regulations enable Canada’s MOU commitment to enter into an equivalency agreement.
• The benefit of providing long-term regulatory certainty to the oil and gas industry to support investments in the reduction of methane emissions as production grows

Alberta and Canada commit to:

• Develop an outcome-based equivalency agreement under the Canadian Environmental Protection Act. On that basis, Canada’s Enhanced Methane Regulations would be stood down in Alberta, in recognition of final provincial regulations and a provincial approach that delivers, over the term of the agreement, 75% methane emissions reductions by 2035. 
• Publish a draft equivalency agreement in 2026 for a 60-day public comment period, with the objective of concluding a final agreement by the end of 2026
• Act reasonably in adjusting this agreement, if required, in the face of a force majeure event
• Jointly select and rely on an independent third party, contracted on an equal cost-shared basis, to conduct methane modelling, analysis of emissions reductions, and to assess methane reduction results
• Canada and Alberta agree that Alberta will publish information explaining the covered sources of methane and province’s approach to meet emissions reduction targets

This equivalency agreement is expected to:

• Achieve a 75% reduction relative to 2014 emissions levels in 2035, be based on published regulations and take into account other measures by Alberta
• Over the term of the agreement, should third party analysis determine that emissions are higher than expected, Alberta commits to take the necessary corrective actions
• Take effect no later than January 1, 2027, and to last for 10 years, subject to the passage of amendments to the Canadian Environmental Protection Act, 1999 contained in the federal Budget 2025 Implementation Act

Recognizing that the first obligations under Canada’s Enhanced Methane Regulations take effect in 2028, the existing Alberta-Canada equivalency agreement on methane regulations remain in place until the new equivalency agreement is completed.

*For Alberta, the English version of this agreement is authoritative.