Canada to Release its Emissions Cap Proposal in October

According to comments made by Environment Minister Steven Guilbeault in an interview, Canada plans to release additional details about its proposed emissions cap in October.

Guilbeault has said that the government’s proposal to limit oil and gas emissions will “definitely” be made public in October, well in advance of the November 30 beginning of the United Nations climate summit in Dubai.

In order to support the fight against climate change, the federal government proposed a new initiative back in August of 2022: a modified carbon pricing system or an industry-specific cap and trade system that limits the amount of emissions companies are permitted to produce.

By 2030, it is expected to help the country achieve its target of a 42% decrease in greenhouse gas emissions below 2019 levels (or a 31% decrease below 2005 levels). The goal of the cap is to reduce emissions without restricting oil and gas production. Its purpose is to minimize carbon leakage risks while maximizing investment potential in decarbonizing one of Canada’s largest sectors.

“It’s no secret, generally speaking, that industry isn’t particularly fond of government coming up with new regulations… But I think by and large, industry understands that we need to tackle emissions, that the world is de-carbonizing whether they like it or not, and they can either be part of the solution or the solution will be imposed upon them,” said Guilbeault.

The oil and gas industry has been strongly against the proposed emissions restrictions, arguing that such a cap must be established on reasonable consultations and that the industry will not accept policies that lead to production cuts and job losses.

Guilbeault’s plan, set for release in October, will offer more details on how the industry will respond to the new legislation. Despite having been scheduled for release in the spring, the draft regulations have been held up by resistance from the industry to the imposition of production cuts.