Canada plans a new scheme to cap emissions from the oil and gas sector

The government of Canada has opened consultations on a plan to develop an oil and gas emissions cap, with the aim to reduce greenhouse gas (GHG) emissions from the hydrocarbon industry by 31% below 2005 levels in 2030. The country proposes to introduce either a cap-and-trade system that sets a regulated limit on emissions from the sector or to modify the pollution pricing benchmark requirements to create price-driven limits on emissions from the oil and gas industry. Canada's national price on carbon pollution for explicit price-based systems is set at CAD50/tCO₂eq (US$39/tCO₂eq) and is expected to ramp up to CAD170/tCO₂eq (US$131/tCO₂eq) by 2030. In 2020, the oil and gas industry produced 27% of Canada's emissions. The country aims to cut its GHG emissions to 40 to 45% of 2005 levels by 2030.