Prime Minister Mark Carney indicated on Friday that the future of the emissions cap imposed on oil and gas producers hinges on additional initiatives aimed at reducing emissions. This suggests a potential willingness by the government to reconsider the policy, marking a departure from Carney’s previous commitment earlier this year. While speaking to journalists in Ottawa, Carney responded to queries about the possibility of abandoning the cap and the tanker ban along the B.C. coast, measures that the oil and gas industry and the Alberta government have urged Ottawa to rescind.
Carney emphasized the importance of achieving results in lowering emissions from the energy, mining, and manufacturing sectors to enhance their global competitiveness, highlighting that the decision on the emissions cap and related policies is contingent on the actions taken. He emphasized the government’s focus on outcomes rather than just objectives.
In March, Carney had assured reporters of maintaining the emissions cap, although he expressed a desire to explore alternative methods for emission reduction. The emissions cap, slated to come into effect in 2030, mandates upstream oil and gas operations to decrease their emissions to 35 percent below the 2019 levels. The implementation of draft regulations by Ottawa, delayed by two years, underscores the government’s commitment to meeting the targets set under the Paris climate accord, which includes reducing emissions by at least 40 percent below 2005 levels by 2030.
The emissions cap forms part of Canada’s strategy to achieve these targets, with the oil and gas sector responsible for approximately 30 percent of total greenhouse gas emissions. Despite efforts, various reports indicate that Canada is currently not on track to meet its 2030 emission reduction goal, with emissions standing at around 8.5 percent below 2005 levels. Carney has been engaged in discussions with Alberta Premier Danielle Smith, exploring a possible “grand bargain” that involves tying Alberta’s pipeline ambitions to the completion of the Pathways Alliance carbon capture initiative.
When questioned about the government’s stance on a new pipeline to the West Coast, Carney emphasized the importance of evaluating projects based on economic benefits, alignment with climate objectives, and advantages for Indigenous communities. The ongoing debate surrounding the emissions cap and tanker ban has raised concerns among industry leaders and politicians, with Enbridge CEO Greg Ebel highlighting the challenges posed by these regulations.
The dispute between Alberta and British Columbia further complicates the situation, with Premier David Eby emphasizing the need to maintain community support and social consensus for future projects. Discussions on potential pipeline projects have also emerged in the political sphere, with Energy and Natural Resources Minister Tim Hodgson emphasizing the necessity of jurisdictional support for advancing such initiatives.
Carney recently proposed reviving the Keystone XL pipeline during a meeting with U.S. President Donald Trump, suggesting a trade-off for relief in Canada’s steel and aluminum sectors. However, critics argue that hurdles remain, particularly if the emissions cap remains unchanged. Conservative MP Andrew Scheer underscored the importance of addressing these regulatory challenges to ensure the viability of pipeline projects.