Canada Proposes Regulations to Cap and Reduce Oil and Gas Emissions

The cap-and-trade system will apply to LNG facilities and upstream oil and gas facilities, including offshore facilities. It will cover all direct GHG emissions, while also accounting for indirect emissions and emissions that are captured and permanently stored. The final 2030 emissions cap and legal upper bound will be set based on the best available information at the time the regulations are finalized.

The proposed regulations aim to reduce GHG emissions through the establishment of a national emission cap-and-trade system. The regulations will establish reporting and verification requirements and a legal upper bound on GHG emissions. The system will apply to direct (Scope 1) GHG emissions, with the proposed treatment of Scope 2 GHG emissions discussed further.

The cap-and-trade system will cover all direct GHG emissions, while also accounting for indirect emissions and emissions that are captured and permanently stored. The GHGs covered would include carbon dioxide, methane, nitrous oxide, and others. The global warming potential of each GHG would be set out in the proposed regulations.

The proposed approach will cap GHG emissions, not production. The Government has engaged with industry to assess the level of technically achievable emissions reductions by 2030. The proposal reflects this foundational work. The final 2030 emissions cap and legal upper bound will be set based on the best available information at the time the regulations are finalized, informed by data and information received from interested parties in response to this framework, as well as by related regulatory design details including coverage of indirect GHG emissions.

To find out more details please visit : https://www.canada.ca/