A Canadian government fund established to help the energy sector reduce methane emissions will cut the country’s overall carbon dioxide emissions by about half a percentage point in its first year, Natural Resources Minister Seamus O’Regan said on Friday.
The oil and gas sector is Canada’s largest industrial emitter of methane, a potent climate-warming greenhouse gas that accounts for 13%, or 91 megatons, of the country’s overall emissions.
In a news release, O’Regan said the C$750 million ($598.61 million) Emissions Reduction Fund would help the industry cut 3.1 megatons of carbon dioxide emissions in the 12 months since it was launched last October. That is the equivalent of taking 674,000 cars off the road.
Canada hopes the fund will spur the oil and gas sector to adopt greener technologies while also supporting energy jobs. The government has signed funding agreements totalling C$71.5 million with 15 companies so far, including privately-owned Tundra Oil & Gas Ltd in Manitoba.
“We have hundreds of thousands of workers who know how to build energy infrastructure,” O’Regan said. “These are the same people who will lower emissions, the same people who will build renewables, the same people who will meet our targets.”
Canada is the world’s fourth-largest oil producer and one of the biggest greenhouse gas emitters on a per capita basis.
Canadian Prime Minister Justin Trudeau’s Liberal government is aiming to cut carbon emissions from 730 megatons per year to 503 megatons by 2030, and has imposed measures including a carbon tax that will steadily ramp up to C$170 a ton.
Canada introduced national methane regulations in 2018, aimed at cutting emissions from the oil and gas sector by 40% to 45% and said in December it will establish new targets for 2030 and 2035. Data released last year, however, showed methane emissions from Canada’s oil sector were higher than previously thought.
U.S. President Joe Biden’s administration also is planning to introduce stricter curbs on methane from the oil and gas industry.