Canada’s 2030 Emissions Reduction Plan Overview
This week Federal Minister of Environment and Climate Change Steven Guilbeault announced Canada’s 2030 Emissions Reduction Plan – Canada’s Nest Steps for Clean Air and a Strong Economy. Overall, the plan provides a clear pathway to net zero emissions by 2050. The plan is also supplemented with a number of economic considerations which address a number of factors including supporting regional economies which are reliant on the oil and gas industry transition to the green economy and addressing global energy demands amidst complex geopolitical challenges.
The Target
The report states that Canada’s average temperatures are rising at twice the global average, and three time in the North. Canada is at a critical point wherein urgent action is needed to avoid a climate catastrophe. As such, the federal government accelerated its emissions reduction plan. The new targets of emissions reduction of 40-45% below 2005 level by 2030 and net zero emissions by 2050.
Accelerating the Transition
The pathway to net zero will profoundly affect the Canadian economy. Energy intensive industries stand to see the most affect as the legislative framework coupled with a steady increase in the carbon tax will make status quo business operations models non competitive. The Federal Government looks to address this through boosted investment for industry to innovate to begin the use of low carbon technology. In total, the 2030 emissions reduction plan will invest $9.1-billion to drive innovation and support Canadian business transition to low carbon operations. The 2030 plan will focus on the following areas to achieve the emissions targets:
· Carbon Pricing: The government is exploring measures that help guarantee the price of pollution. This plan will look to apply an investment approach to carbon pricing to mitigate the risk for the private sector making low-carbon investments. These investment approaches include carbon contracts for differences, which enshrine future price levels in contracts between the Government and low-carbon project investors.
· Helping to reduce energy costs for our homes and buildings, through the development of the $150-million-dollar Canada Green Buildings Strategy and the $458.5-million-dollar Canada Greener Homes Loan program. In conjunction with the provinces both of these programs will work to drive deep retrofits in the Canadian building stock and drive new construction to the highest zero-carbon standards.
· Empowering communities to take climate action, through the expansion of the Low Carbon Economy Fund to a $2.2-billion-dollar renewal. This funding will work to engage provinces, territories, municipalities, universities, colleges, schools, hospitals, businesses, not-for-profits organizations, and Indigenous communities to engage in further climate action.
The fund will also provide $180-million to develop a new Indigenous Leadership Fund which will support clean energy and climate initiatives led by First Nations, Inuit and Metis communities and organization.
The Government of Canada will also support regional growth opportunities and energy system transformation through a $25-million-dollar investment in Regional Strategic Initiatives that drive economic prosperity and the creation of sustainable jobs in a net-zero economy.
· Making it easier for Canadians to switch to electric vehicles, the government will invest $400-million for zero-emission vehicle (ZEV) charging station, in total the federal government will look to add 50,000 ZEV chargers across Canada through the duration of this plan.
The Canada Infrastructure Bank will invest $500-million in ZEV charging and refueling infrastructure.
The Government of Canada will provide $1.7-billion to extend the Incentives for Zero-Emissions Vehicles program making it more affordable for Canadians to purchase and drive new light-duty ZEV’s.
The Government of Canada will implement a sale mandate which will require that 20% of light-duty vehicle sales by 2026 shall be ZEV’s. These numbers will increase to 60% 2030 and 100% by 2035 for light-duty ZEV’s.
The Government of Canada will also aim to address the emissions of medium -and heavy-duty vehicles (MHDVs), by aiming to have 35% of MHDV sales be ZEVs by 2030. In addition to this the government will develop a regulation which is set to ensure that 100% of MHDV sales by 2040 will be ZEVs. This regulation will be developed in consultation with business and industry to ensure that targets can be reasonably met.
· Driving down carbon pollution from the oil and gas sector, the Government of Canada will work with relevant stakeholders in the oil and gas sector, provinces and indigenous communities to define and implement a cap on oil and gas sector emissions. This guideline will work to steadily draw down oil and gas carbon emissions to zero by 2050.
· Powering the economy with renewable electricity, the Federal Government will work with the provinces to establish a Pan-Canadian Grid Council to promote clean electricity infrastructure.
Canada will invest $600-million in the Smart Renewables and Electrification Pathways Program to support renewable electricity and grid modernization project.
Canada will invest $250-million to support predevelopment for large scale clean electricity projects.
· Helping industries develop and adopt clean technology in their journey to net-zero emissions, Canada will work to ensure that industry remain competitive while transitioning into the green economy. The Government will work to develop carbon capture, utilization and storage technologies to ensure industry has access to the right tools to achieve net-zero by 2050. Canada will also develop an investment tax credit to incentives the development and adoption of the above-mentioned technology.
The Federal Government will also invest $194-million to expand the Industrial Energy Management System to support ISO 50001 certification.
· Investing in nature and natural climate solutions: Canada will invest an additional $780-million for the Nature Smart Climate Solutions Fund to deliver additional emissions reductions from nature-based climate solutions.
· Supporting farmers as partners in building a clean, prosperous future. Canada will make the following investments in the farming sector to support a pathway to low emissions farming:
- $470-million in the Agricultural Climate Solutions: On-Farm Action Fund which will help farmers to adopt sustainable practices.
- $330-million to triple funding for the Agricultural Clean Technology Program which supports the development and purchase among farmers of more energy efficient equipment.
- $100-million in transformative science to support the sector’s role in the transition to a net-zero economy.
Setting the Foundations for a Net-Zero Economy
The 2030 emissions reduction plan, if achieved, will set a strong foundation for Canada in achieving net-zero by 2050. This plan is ambitious and will transform the Canadian economy in a short period of time. Therefore it is critical that industry begin accessing the funding and support being made available by all levels of government to remain competitive as the legislative framework shifts the business environment into a net-zero economy over the next thirty years. Wondering how this plan may affect your business or organization? Contact Johnstone Karl Strategy for further insight and advocacy strategies.
