Sources say that Canada could drop its oil emission cap as part a new climate plan

Three sources familiar with the discussions said that the Canadian government was in talks with Alberta and energy companies about removing a federal cap on the emissions of the oil and gas industry if they reduced their carbon footprints in other ways. Three sources who weren't authorized to publicly discuss the talks said that the government of Prime Minister Mark Carney has discussed removing a federal cap on emissions from Canada's oil and gas sector with energy companies and Alberta if the industry and province reduce their carbon footprint in other ways.

The Canadian emissions cap is not yet implemented by legislation. The prospect of it has been discussed for many years.

Those who condemn the use of language are a broad group.

Canadian oil and gas firms have stated that it will force them into reducing production. Carney, who was elected in April on a promise to protect Canada's economic interests from U.S. Tariffs, has been criticized for moving away from the environmental focus of his Liberal Party.

Sources said that the tone of his government has changed dramatically from a few short weeks ago. They added that officials had suggested until recently that the cap on emissions would remain in place. Carney stated during his election campaign that he would maintain the cap on emissions, which will not take effect until 2030. Justin Trudeau, his predecessor, published a draft regulation for the cap in November last year. Sources said that the current discussions could lead to the cap being removed as part of the new "climate competition strategy" which the federal Government aims to announce later this fall. Carney's Office did not respond to our request for comment. Two sources stated that any move to remove the cap will be dependent on Alberta and its oil sector renewing their serious commitments towards emissions reduction, including but not limited, moving forward with the Pathways project for carbon capture and storage.

Carney, speaking at an Edmonton meeting of the ruling Liberal Party this week, said that Canada's new strategy for climate competitiveness will be based on "results rather than objectives and investment over prohibition".

The oil and gas industry is the most polluting in Canada. Its emissions are increasing due to increased production of the oil sands.

Ottawa is unlikely to meet its international climate commitments to reduce greenhouse gas emissions by 40 to 45% from 2005 levels if the oil and natural gas sector does not intensify efforts to decarbonize by 2030.

The cap would force the oil and gas industry to reduce emissions by 37%, or 137 million tons, below the levels of 2022, before 2030. Carney pledged to make Canada "the world's leading superpower in energy", advancing clean energy development and making the conventional oil-and-gas sector more competitive.

He also sought to repair the federal relationship with Alberta that had been strained under Trudeau due to their heavy focus on environmental concerns. (Reporting from Amanda Stephenson, Calgary; Additional reporting by David Ljunggren, Ottawa; Editing and Margueritachoy by Caroline Stauffer)

(source: Reuters)