Canada unveiled planned regulations to limit emissions from the oil and gas sector using a cap-and-trade system, fulfilling a promise by Prime Minister Justin Trudeau's government to cut emissions in its most polluting sector, said Hydrocarbonprocessing.
Here are details on the proposed regulations: Cap-and-trade is a market-based system where the regulator limits emissions and issues emissions allowances that producers can use if they exceed the cap. The government proposes to cap 2030 emissions at 35% to 38% below 2019 levels, or at 106 to 112 megatons compared with 171 megatons in 2019, while providing compliance flexibilities - or allowances - to emit up to a level about 20% of 23% below 2019 levels, or up to 131 to 137 megatons.
In 2021, the oil and gas sector was the largest source of greenhouse gas (GHG) emissions, accounting for 28% of total national emissions with 189 megatons of carbon dioxide equivalent (Mt CO2 eq) emitted, according to official data. In 2021, the sector's GHG emissions were 3% higher than in 2020. Over the period from 1990 to 2021, the sector's GHG emissions increased by 88%.
Each emission allowance would be equivalent to one ton of carbon dioxide equivalent (CO2e). Emission allowances issued under the cap-and-trade regulations would not be fungible with other carbon pricing systems or regulatory instruments. Allowances will initially be free.
We remind, Maersk is about to launch the first of its 18 large methanol-enabled vessels currently on order. On 9 February 2024, it will enter service on the AE7 string connecting Asia and Europe, which includes port calls in Shanghai, Tanjung Pelepas, Colombo and Hamburg (see all port calls in the fact box below), with Ningbo, China, being its first destination.
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