It is important that we do not confine ourselves to submitting on ECCC’s discussion questions.  This section covers suggested responses on both the discussion questions and many other significant issues raised by the Framework.

The Climate Messengers do not want to dictate to anyone what they should say in their submissions, but if you are pressed for time, please feel free to consider using some of these suggestions.  They are a consolidation of the recommendations that we have made in the various sections of this Toolkit.  The links below will take you to the detailed discussions of each issue if you are interested.

If you wish to use any of these suggestions, please adopt them as your own and do not attribute them back to us.  If you want to use any information that we have cited from other sources, we hope that you will please consider citing that source.

Whatever you do, please try to put things into your own words.  Unique, individual submissions are the most valuable submissions to make to the online public consultation.

Remember that you must make your submissions by sending an email to PlanPetrolieretGazier-OilandGasPlan@ec.gc.ca by 5 February 2024.

HOW THE O&G EMISSIONS CAP WORKS:

Scope of Application, Covered Facilities, Covered Activities

Tell the federal government (using references to the Framework and to any papers we cite here, as you may wish):

• It is good that the government plans to include small facilities, which account for one third of the sector’s emissions, in the cap. The government must ensure that small facilities remain within the scope in the forthcoming regulations, despite potential reporting challenges.

• It is good that LNG facilities will be included under the cap. However, the government must address the serious lack of information on the anticipated emissions from the production of LNG and explain how it is possible to add an entirely new fossil fuel industry and still meet the cap’s emission targets.

• Downstream pipelines and refineries, which account for 20 Mt of emissions annually, must be included under the emissions cap, as originally envisioned.

The Emissions Cap:  Not ambitious enough.  Keep your promise!

• The proposed level of the oil and gas sector emissions cap is nowhere near ambitious enough. It is not aligned with the emissions reductions being required in other sectors of the economy, with Canada’s 2030 Target under the Paris Agreement (enshrined in law in the Canadian Net-Zero Emissions Accountability Act), or with a pathway that sees Canada reaching net-zero GHG emissions by 2050.

• The federal government must deliver the emissions reductions promised in their 2022 Emissions Reduction Plan, which suggested the cap for the O&G sector would be 110 Mt in 2030. [147]

The Legal Upper Bound: Don’t allow “compliance flexibilities” to inflate emissions!

• To ensure Canada can meet our emissions reduction targets, the “compliance flexibility” allowing fossil fuel companies to pay to emit 25 Mt per year over and above the cap must be eliminated. Another way to put it is that the legal upper bound for emissions should be the same amount as the emissions cap.

• The legal upper bound for oil and gas sector emissions in 2030 should be no more than the 110 Mt promised in the Emissions Reduction Plan.

The 2030 Cap Level is Not Ambitious Enough – The Numbers

• Hold the federal government accountable to deliver the emissions reductions promised in their 2022 Emissions Reduction Plan, which suggested the cap for the O&G sector would be 110 Mt in 2030. [148] That means:

◦ The “compliance flexibility” allowing fossil fuel companies to pay to emit 25 Mt per year over and above the cap must be eliminated. Another way to put it is that the legal upper bound for emissions should be the same amount as the emissions cap.

◦ The legal upper bound for oil and gas sector emissions in 2030 should be no more than the 110 Mt promised in the Emissions Reduction Plan.

◦ The scope of application of the cap on oil and gas sector emissions should be the same as envisioned in the Emissions Reduction Plan. Downstream pipelines and refineries were to be included, but have been omitted from the cap proposed in the Framework. They must be put back in scope.

• Despite the jurisdictional challenges discussed above, the federal government should not be excessively timid. The Oil & Gas Emissions Cap level should be considerably more stringent.

The Cap Proposed by the Framework Will Make It Almost Impossible to Meet Our

Canada-Wide 2030 Target

Tell the federal government (using references to the Framework and to any papers we cite here, as you may wish):

• To ensure Canada can meet our emissions reduction targets, the “compliance flexibility” allowing fossil fuel companies to pay to emit 25 Mt per year over and above the cap must be eliminated. Another way to put it is that the legal upper bound for emissions should be the same amount as the emissions cap.

• The legal upper bound for oil and gas sector emissions in 2030 should be no more than the 110 Mt promised in the Emissions Reduction Plan.

• Downstream pipelines and refineries, which account for 20 Mt of emissions annually, should be included under the emissions cap, as originally envisioned.

The Oil and Gas Industry’s Re-investments to Reduce Emissions Has Been Contemptible

• The federal government must acknowledge that the oil and gas companies are not acting in good faith when they purport to be working to reduce their emissions from production.  The government should do everything in its power to make the oil and gas producers significantly cut their emissions.

The O&G Emissions Cap is based on O&G Production Increasing by 2030

• While it is clear that the federal government does not have authority to limit O&G production, they must get creative and use every tool in the toolbox to discourage O&G production and help Canada transition to a fossil fuel-free future.

Emissions Trading

• Allowing companies to trade emissions allowances (the “trade” part of “cap-and-trade”) is unobjectionable.

• To ensure emissions reduction targets are met, the government must regulate and closely monitor the trading of allowances and emissions credits. Particularly when companies are relying on new technologies such as carbon capture and storage (CCS), it will be important to verify that the reported emissions reductions have actually taken place and result in the permanent removal of GHGs.

Multi-Year Compliance Periods

• Reconciling a facility’s actual emissions with their allowances and credits every three years is reasonable when the cap is first introduced. 

• In implementing multi-year compliance periods, the government must have sufficient authority to ensure emissions targets are met. The requirement to report emissions annually must be retained, and the government should be able to hold facilities accountable if their emissions reductions are off-track.

• To ensure the increasingly strict emissions cap in future years can be met, multi-year compliance periods should be phased out by 2030 and be replaced by annual compliance periods.

Banking of Emissions Allowances

• To ensure emissions are reduced as fast as possible and the 2030 target is met, banking of allowances should be limited to a single three-year compliance period, rather than six years. 

• To prevent the accumulation of a glut of emissions credits in the industry, unlimited banking of allowances should not be allowed. A clear limit on the total quantity of credits that can be banked must be included in the regulations, with the percentage set at a low level that accounts for the declining emissions cap in future years.

• To ensure the increasingly strict emissions cap in future years can be met, the regulations should phase out the ability to bank allowances, and completely eliminate it well before Canada reaches net-zero in 2050.

• To help prevent a glut of emissions allowances, the government should ensure this cap-and-trade system continues to cover only the O&G sector going forward. Expanding the cap-and-trade system to cover more industries could lead to an over-allocation of emissions allowances.

• To regulate the quantity of credit allowances on an ongoing basis, in order to prevent either a deficit or a glut, the draft regulations must either include a market regulatory mechanism similar to the EU ETS Market Stability Reserve or a provision that the government may implement such a system without further consultation if it sees fit to do so.

Making Contributions to a Decarbonization Fund

• Contributions to the decarbonization fund would be funnelled back to the oil and gas industry to help them pay to reduce GHG emissions. This “double dipping” is absurd, giving the industry credit for the same funds twice under the cap. 

• In November 2021, the Auditor General released a report outlining how, when the federal government tried to design and implement an emissions reduction fund, it failed badly. They should not try again.

• The decarbonization fund should be eliminated, or at the very least the funds should be given to organizations with a proven track record of reducing GHG emissions rather than the O&G industry.

Domestic Offset Credits

• Offsets do nothing to meet the objective of this Framework to reduce GHG emissions from oil and gas production.

• Offsets do not work. They create almost no emissions reductions in the real world.

• Offsets are linked to human rights abuses and greenwashing, [149] and the federal government should not promote their use.

• It’s not fair to allow oil and gas companies to pay to keep polluting rather than doing their part to reduce Canada’s GHG emissions.

• ECCC should eliminate the use of offset credits in the cap-and-trade system and force companies to directly reduce GHG emissions from oil and gas production instead.

• If offsets are not eliminated, ECCC should reduce the percentage of a facility’s allowable emissions that could be covered by offset credits.

• If offsets are not eliminated, ECCC should develop a credible system to confirm with certainty that offset projects have permanently removed or prevented the promised GHG emissions beyond what would have resulted if the offset had not been purchased.

Internationally Transferred Mitigation Outcomes (ITMOs)

• Do not include ITMOs as a compliance flexibility option for the Oil and Gas Emissions Cap.

• Note that ITMOs are an even less effective instrument than domestic offsets and do nothing to accomplish the Framework’s objective to reduce GHG emissions from the oil and gas sector.

• Note that the Paris Agreement, which created ITMOs, states they are intended “to allow for higher ambition in their mitigation and adaptation actions and to promote sustainable development and environmental integrity”, [150] not to create an excuse to permit emissions in any given industrial centre.

• If ITMOs are included as part of the Oil and Gas Emissions Cap, the federal government must manage the transactions in order to avoid the emission reductions being “double counted” in both Canada and the foreign country.  

Delayed Reporting and Verification

The loopholes created by the proposed delayed reporting and verification of GHG emissions should be closed. Specifically,

• Existing oil and gas facilities should be required to begin reporting and verification immediately when the regulations come into force;

• New oil and gas facilities should be required to begin reporting and verification immediately when operations commence;

• New oil and gas facilities should be subject to the emissions cap immediately when operations commence; and

• The federal government should clarify exactly what parts of the cap-and-trade system it is considering “phasing in” between 2026 and 2030 and how, so stakeholders can be consulted in a meaningful way.