Greenhouse gas emissions cap for the oil and gas sector in Canada 2030

In 2023, the Government of Canada announced plans to limit oil and gas sector emissions by introducing a cap-and-trade system. The proposal, which would be phased in from 2026, aims to reduce emissions from this sector by 35 to 38 percent by 2030, relative to 2019 baseline levels, resulting in emissions of between 106 and 112 million metric tons of carbon dioxide equivalent (MtCO₂e). The framework also provides compliance flexibilities that would allow the industry to emit an additional 25 MtCO₂e using compliance credits. This legal upper bound concept would allow 2030 emissions to be as high as 131 to 137 MtCO₂e, or 20 to 23 percent below 2019 baseline levels.

The oil and gas sector accounted for almost 30 percent of Canada's total emissions in 2021, making it the country's most polluting sector.