{"id":7400,"date":"2022-03-30T14:56:11","date_gmt":"2022-03-30T14:56:11","guid":{"rendered":"https:\/\/www.rbc.com\/en\/thought-leadership\/laying-the-foundation-canadas-2030-emissions-reduction-plan\/"},"modified":"2022-03-30T14:56:11","modified_gmt":"2022-03-30T14:56:11","slug":"laying-the-foundation-canadas-2030-emissions-reduction-plan","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/economics\/featured-insights\/laying-the-foundation-canadas-2030-emissions-reduction-plan\/","title":{"rendered":"Laying the Foundation: Canada’s 2030 Emissions Reduction Plan"},"content":{"rendered":"

Key Points<\/h4>\n
  • At the Globe Forum in Vancouver, the Prime Minister unveiled a comprehensive plan for reducing Canada\u2019s emissions on a sector by sector basis. <\/li>\n
  • The plan outlined $9.1 billion in new spending aimed at deploying electric vehicles, retrofitting buildings, improving electrical infrastructure and supporting farmers. With more expected in the federal budget on April 7, the challenge will shift from designing new programs, to aligning future policy with emissions goals across government and deploying capital to meet the moment. All this in the midst of a global energy crisis.<\/li>\n
  • While light on details, it set an ambitious target to cut oil and gas sector emissions by 42% from 2019 levels. <\/li>\n
  • Beyond major funding announcements, the plan includes efforts to develop new technologies and attract investment in emissions-cutting projects. It was quiet, however, on how international emissions credits could help Canada meet interim targets while providing the energy and agricultural products the world needs.<\/li>\n
  • The government will explore measures to guarantee future carbon pricing for large emitters, to add certainty to cash flows for major decarbonization projects, attracting both private sector investment and financial sector funding.<\/li>\n
    \n

    In its unveiling, Prime Minister Justin Trudeau called the Emissions Reduction Plan the \u201cboldest and most specific step yet\u201d in Canada\u2019s path to Net Zero. The government laid out ambitious sectoral targets and added significant new funding in several areas to drive towards its goal of cutting emissions by 40% by 2030. It aims to achieve half those cuts by 2026, just four short years from now. <\/p>\n

    Canada last upped its ambition in December 2020, releasing a plan to cut emissions to 503 Mt. Tuesday\u2019s release added another 64 million tonnes in projected cuts, nearly half from Canada\u2019s carbon-intensive oil and gas sector. Buildings, industry and transportation accounted for the next largest cuts with the balance spread across remaining sectors. <\/p>\n

    The government will also explore options to guarantee the future price of carbon, including contracts with industry and legislative means to keep the carbon price on its current path. This measure is targeted at removing uncertainty around the future benefits of investment in abatement, and, if advanced, could be key to unlocking significant demand for major decarbonization projects and the financing structures that will make them possible. <\/p>\n

    The plan projects major emissions cuts in oil and gas production, with sector wide emissions falling 42% from 2019 levels. It relies heavily on methane cuts in conventional production, but despite projecting big cuts in oil sands emissions, leaves out critical information on core tools like investment tax credit for carbon capture. The government is expected to release more details on ICT in the federal budget.<\/p>\n

    The planned cuts are a call to action for producers, since 2030 oil sands emission are 7 million tonnes lower than those proposed by the industry.<\/p>\n