Canada Energy Transition Blog

Federal government establishes 2030 Emissions Reduction Plan

Apr 1, 2022 5 MIN READ
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Smoking chimneys power against the blue sky

On March 29, 2022, the federal Minister of the Environment and Climate Change established a greenhouse gas (GHG) reduction plan for 2030, the first of a series of GHG reduction plans required under the Canadian Net-Zero Emissions Accountability Act (the Act)[1] which came into force last year. Among other things, the plan — titled the 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy [PDF] (the 2030 Plan) — contains Canada’s national GHG emissions reduction target for 2030 (the 2030 Target), which is 40–45% below 2005 levels, a summary of Canada’s most recent GHG emissions, and the measures and strategies to be implemented through the 2030 Plan to achieve the 2030 Target.

In this blog post, we highlight some of the measures and strategies proposed in the 2030 Plan to achieve the 2030 Target. For more information about the Act, its reporting and oversight mechanisms, and its potential implications for Canada’s efforts to meet its GHG emissions reduction targets, see our previous blog post about the Act.

Canada’s emissions profile, measures and strategies in the 2030 Plan

According to the 2030 Plan, total GHG emissions in Canada were 730 million tonnes of carbon dioxide equivalent in 2019. By contrast, the 2030 Target calls for GHG emissions to be 443 million tonnes (40% below 2005 levels), at most.[2]

To achieve the 2030 Target and put Canada on a path to achieve net-zero emissions by 2050, the 2030 Plan includes $9.1 billion in new investments, economy-wide measures such as carbon pricing and clean fuels, as well as sector-specific measures in sectors such as electricity, oil and gas, and agriculture.[3] Key economy-wide and sector-specific measures are highlighted below.

Economy-wide measures to achieve 2030 Target

New economy-wide measures in the 2030 Plan include

Carbon pricing

  • Recommitting to the previously announced $15/tonne annual increase in the backstop carbon price under the Greenhous Gas Pollution Pricing Act starting in 2023, with a target level of $170/tonne by 2030.  
  • Enhancing long-term carbon price certainty, such as through carbon contracts for differences between the government and low-carbon project investors that mitigate risk of future carbon price levels.
  • Developing a Federal GHG Offset System that allows the generation of credits to encourage voluntary project activities that reduce GHG emissions or remove them from the atmosphere.
  • Funding the deployment of clean technology to decarbonize industrial sectors (through the Decarbonization Incentive Program) and production and delivery of clean electricity (through the Future Electricity Fund).

Clean fuels

  • Exploring the feasibility of a bioenergy strategy to use agricultural, forestry and municipal waste resources to generate energy.
  • Consulting on a more stringent Clean Fuel Regulation, to decrease the carbon intensity of liquid fossil fuels by 15% below 2016 levels by 2030.

Low Carbon Economy Fund

  • Expanding the Low Carbon Economy Fund through a $2.2-billion recapitalization, to further climate actions from provinces and territories, municipalities, universities, colleges, schools, hospitals, businesses, not-for-profit organizations and Indigenous communities and organizations.

Reducing methane

  • Releasing a plan in 2022 to reduce methane emissions across the economy.

Sector-specific measures to achieve 2030 Target

New sector-specific measures in the 2030 Plan include

Electricity

  • Requiring net-zero electricity by 2035 through a Clean Electricity Standard, for which a discussion paper has been released and consultation has been initiated with provinces, territories and Indigenous partners.
  • Expanding non-emitting energy deployment and development, including through additional investments in renewable electricity and grid modernization projects ($600 million) and predevelopment work for large clean electricity projects ($250 million).
  • Helping connect regions with clean power, including by investing in regional net-zero energy plans, supporting de-risking and accelerating the development of new interprovincial transmission lines for clean power.

Heavy industry (including mining and manufacturing)

  • Introducing a new Buy Clean Strategy for federal investments, to prioritize made-in-Canada low-carbon products in infrastructure.
  • Enhancing efforts to decarbonize large emitters through new investments in the Industrial Energy Management Program, including for energy efficiency retrofits for small-to-moderate projects ($194 million), and developing a Carbon Capture, Utilization and Storage (CCUS) Strategy.

Oil and gas

  • Capping emissions “at the pace and scale needed to get to net zero by 2050,” the details of which will be developed in collaboration with industry, provinces and Indigenous partners starting this spring.
  • Supporting development of CCUS, including through policy certainty (e.g., by providing the details of the CCUS investment tax credit that was announced in 2021).
  • Developing new measures to reduce oil and gas methane emissions by at least 75% below 2012 levels by 2030, including strengthened regulations that will be introduced in early 2023.

Transportation

  • Accelerating the switch to zero-emission on-road vehicles (ZEVs), including by setting annually increasing requirements towards achieving 100% light duty vehicle ZEV sales by 2035 and developing a medium-and-heavy-duty (MHDV) ZEV regulation to require 100% MHDV sales to be ZEVs by 2040 for a subset of vehicle types (based on feasibility).
  • Supporting transit agencies and school boards in transitioning bus fleets to ZEVs, including through planning and purchasing at least 5,000 zero-emission buses.

Agriculture

  • Making additional investments in on-farm climate mitigation practices and practices that contribute to the fertilizer emissions target and Global Methane Pledge ($470 million), and in a resilient agricultural landscapes program to support carbon sequestration and adaptation ($150 million).
  • Supporting the development and adoption of clean technologies, including through increased funding ($330 million).
  • Funding research supporting a path to net-zero emissions, knowledge transfer and developing metrics ($100 million).

Next steps

As indicated above, the Government of Canada will consult on certain commitments in the 2030 Plan, including capping emissions from the oil and gas sector at current levels and requiring that they decline “at the pace and scale needed to get to net zero by 2050” and transitioning to a net-zero emitting electricity grid by 2035.[4]

With the 2030 Plan now established for the 2030 Target, the Act requires that progress reports be made in 2023, 2025 and 2027. The Act also requires the Government of Canada to set a more ambitious 2035 GHG emissions target by December 1, 2024, and to publish a GHG reduction plan for this revised target by 2030. Around that time, the Government of Canada will prepare a report to assess whether the 2030 Target was met and, if not, reasons why it was not met and actions the Government of Canada will take to address that failure.

 


[1] SC 2021, c 22.

[2] 2030 Plan [PDF], PDF 12 and 14.

[3] 2030 Plan, PDF 9.