Canada has officially ended its government support for international fossil fuel projects, fulfilling a commitment it made at last year’s Conference of the Parties, or COP, Ottawa said in a statement.
Source: Oil Price
“The Government of Canada is taking a suite of actions to achieve Canada’s climate goals,” the statement read. “These include accelerating our G20 commitment “to phase out and rationalize inefficient fossil fuel subsidies” from 2025 to 2023, and to develop a plan to phase out public financing of the fossil fuel sector, including by federal Crown corporations, in accordance with the December 2021 Ministerial mandate letter commitments.”
Per the new guidelines, the Canadian government will not provide support to any new oil and gas projects globally but will continue supporting existing projects as these do not fall within the scope of its COP26 commitment.
Support from the government will also continue for oil and gas projects in Canada itself, while the end of support will concern only projects outside of the country. The sort of support covered by the guidelines includes “financial (including commercial or concessional), advocacy, export finance, and any other direct financial or promotional support provided by Government of Canada and Crown entities.
There is also another stipulation limiting the scope of the new guidelines and that stipulation is the word “unabated”, which, per the government statement, means “the absence of effective (leading to significant emissions reductions), operational carbon capture and storage (CCS)/carbon capture, utilization and storage (CCUS) or equivalent technologies in the power generation sector.”
In other words, if a new oil and gas project includes carbon capture or similar mitigation mechanisms, the Canadian government could support it with a clear conscience even after January 2023—something that is bound to attract criticism from environmentalist organizations.
Canada is one of 38 countries that pledged to end support for new oil and gas projects at last year’s COP26 in Scotland.
By Irina Slav for Oilprice.com
