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HomeNewsFeds suggest to cap oil, fuel emissions utilizing industry-specific carbon pricing system

Feds suggest to cap oil, fuel emissions utilizing industry-specific carbon pricing system


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OTTAWA — The federal authorities is proposing to make use of an industry-specific cap-and-trade system or a modified carbon pricing system to set a ceiling for emissions from the oil and fuel sector and drive them down nearly 40 per cent by the tip of this decade.

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The 2 choices are contained in a dialogue paper Surroundings Minister Steven Guilbeault will publish Monday. It’s the first glimpse Canadians are getting of how the Liberals anticipate to implement the oil and fuel emissions cap promised in final yr’s election.

The oil and fuel {industry} accounts for greater than one-quarter of Canada’s complete emissions — 179 million tonnes in 2020, or about what a median automotive would emit driving across the equator greater than 17 million instances.

“We merely can not ignore the truth that the oil and fuel sector is Canada’s largest emitter,” Guilbeault mentioned in April throughout a Home of Commons committee assembly finding out the proposed emissions cap on oil and fuel.

What Guilbeault didn’t say then, and what the dialogue paper doesn’t say now, is what the precise emissions cap will likely be. It’s supposed to begin at “present ranges” — which going by the info that was accessible when that promise was made would imply 2019 ranges, or 203.5 million tonnes.

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Background paperwork and authorities sources counsel the cap for 2030 will likely be very near the one proposed within the new nationwide Emissions Discount Plan in March — 110 million tonnes. That’s a 46 per cent lower from 2019 ranges, and 32 per cent over 2005.

Canada is aiming to chop emissions throughout all sectors 40 to 45 per cent from 2005 ranges by 2030.

The oil and fuel sector has not had emissions that low since 1992. Within the final three many years, as manufacturing of fuel, typical oil and oilsands soared, emissions from the sector have risen 83 per cent. Total emissions in Canada are about 23 per cent greater over the identical time interval.

Enter on the choices to handle the cap will likely be accepted till Sept. 21 with Guilbeault aiming to unveil the ultimate plan early in 2023.

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The primary proposed choice entails a brand new cap-and-trade system on the oil and fuel sector in isolation. The whole emissions allowed can be divided into particular person allowances which will likely be allotted to particular corporations primarily via an public sale.

Firms that don’t purchase sufficient allowances to cowl their emissions must purchase allowance credit from different oil and fuel corporations that purchased greater than they want.

The funds raised from the public sale can be recycled to applications that assist the sector lower emissions.

The second choice would modify the economic carbon worth already utilized to the oil and fuel sector, presumably by climbing the value itself if wanted, however with the purpose of making certain the emissions from the oil and fuel {industry} itself fall by limiting the buying and selling of carbon credit to the sector.

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Firms can at present cut back the carbon worth they pay by shopping for credit from others that produce lower than their emissions restrict. The modified plan would enable them solely to purchase credit from different oil and fuel corporations, not from different industries.

Most of Canada’s oil and fuel producers are already slicing emissions on account of different rules and a need to change into a cleaner, extra aggressive choice for international clients.

That has been the Conservative social gathering’s place on the {industry} for years — utilizing cleaner Canadian fossil fuels to displace dirtier ones produced elsewhere.

The {industry} has work to do, significantly on the oil aspect, the place Canada’s heavier oils require extra power to extract from the bottom than in locations like Saudi Arabia. Whereas oilsands emissions per barrel of oil, often called the emissions depth, is down about 30 per cent since 1990, it’s nonetheless greater than many international rivals.

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The Oil Sands Pathway Alliance, with six of the largest oilsands corporations on board, is aiming to get emissions to web zero by 2050, primarily via carbon seize and storage tasks that entice greenhouse gases earlier than they go into the environment after which retailer them again underground.

The alliance, whose member corporations account for 95 per cent of oilsands manufacturing, launched a plan this spring aiming to chop 22 million tonnes of emissions from 2019 ranges by 2030.

Firm leaders have mentioned they’re not against a cap, however insist it have to be sensible and based mostly on consultations with {industry} about what is possible. Something greater than that might probably drive manufacturing cuts and job losses, they’ve argued.

However the Alliance and authorities stay far aside on some elementary points, reminiscent of figuring out the place present emission ranges truly stand. The latest nationwide stock report says oilsands manufacturing and processing emissions have been 83 million tonnes in 2019, however the Alliance pegs the determine at 68 million.

A authorities official, talking on background as a result of he was not licensed to talk publicly, mentioned if the cap on emissions for the oil and fuel sector is available in greater than the Emissions Discount Plan, it can drive different industries to chop greater than their share or Canada received’t meet its 2030 targets.

This report by The Canadian Press was first revealed July 17, 2022.

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