Canada’s upcoming emissions cap on the oil and gas sector aims to cut greenhouse gas emissions by 37% by 2030 from 2022 levels. However, the energy industry and provinces like Alberta are strongly opposing it. 

The plan, unveiled Monday, introduces a cap-and-trade system designed to encourage higher-polluting firms to invest in emissions-reduction projects while recognizing better-performing companies. The intent to cap the oil and gas industry was first revealed during the COP28 last year in Dubai. 

Beyond Black Gold: A Green Transition?

Environment Minister Steven Guilbeault clearly emphasized the importance of this move, stating that:

“Every sector of the economy in Canada should be doing its fair share when it comes to limiting our country’s greenhouse gas pollution, and that includes the oil and gas sector. We are asking oil and gas companies who have made record profits in recent years to reinvest some of that money into technology that will reduce pollution in the oil and gas sector and create jobs for Canadian workers and businesses. ”

Canada’s oil and gas sector contributed 31% of the country’s total emissions in 2022, per the latest National Inventory Report. It is the largest emitting sector, followed by the transportation and buildings sectors.

High Stakes in the Oil Sands

In 2022, Canada’s oil sands led to oil and gas emissions of 87 megatonnes or 40% of the sector’s total. The sector’s emissions have largely been driven by increased production. 

Since 1990, Canada’s total crude oil output surged by 193%, primarily fueled by oil sand operations, which grew over 800% and accounted for 80% of this production increase. This growth underscores the oil sands’ significant impact on Canada’s total emissions.

These major carbon emitters are largely concentrated in the provinces of Alberta and Saskatchewan, where oil sands and natural gas production are prevalent. Here are a few key players, with their latest GHG emissions reported and net zero goals. 

Suncor Energy Inc.

One of Canada’s largest integrated energy companies, Suncor operates in Alberta’s oil sands, where its extraction and processing activities generate significant emissions. The oil major’s GHG emissions totaled almost 35 million metric tons of carbon dioxide equivalent (MtCO₂e) in 2022. 

Suncor aims to achieve net zero in its operations by 2050 and cut emissions by 10 megatonnes across the value chain by 2030. The company has been actively pursuing emissions reduction initiatives, including investments in carbon capture and renewable energy.

Canadian Natural Resources Limited (CNRL)

CNRL is among Canada’s top oil sands producers and one of the largest carbon emitters in the country, releasing over 23 million MtCO₂e in 2022. They are a key member of the Pathways Alliance, along with Suncor, which aims to build carbon capture and storage (CCS) networks to reduce sector emissions.

• RELATED: Canada’s $16.5 Billion Bet on Carbon Capture: Could It Cut Oil Sands Emissions?

The energy firm commits to reducing its carbon footprint by 40% in Scope 1 and 2 GHG emissions by 2035m compared with the 2020 baseline. It also targets to reach net zero emissions by 2050. 

Imperial Oil Limited

A major player in the oil sands and petrochemical industries, Imperial Oil operates facilities with large carbon footprints, including open-pit mining and in-situ extraction operations. It has also partnered with CCS initiatives to cut emissions.

The oil major aims to hit net-zero scope 1 and 2 emissions, from operated assets by 2050. Its emissions totaled 8.9 million MtCO₂e in 2021.

Cenovus Energy Inc.

Known for its oil sands and conventional oil operations, Cenovus has significant emissions, especially from its steam-assisted gravity drainage (SAGD) operations. Cenovus is also part of the Pathways Alliance, focusing on long-term decarbonization.

The company aims to slash GHG emissions to net zero by 2050, with 18.2 million MtCO₂e produced in 2022. 

How Canada’s Emissions Cap Could Redefine Oil & Gas

Canada’s proposed emissions cap for the sector focuses on emissions rather than limiting production. These regulations are informed by discussions with industry, Indigenous communities, provinces, territories, and other stakeholders and are designed to align with achievable technical measures, per the government’s statement. This approach allows for production growth, with Environment and Climate Change Canada projecting a 16% production increase by 2030-2032 from 2019 levels, assuming companies implement decarbonization measures.

The pollution cap will regulate upstream oil and gas facilities—including offshore and liquefied natural gas (LNG) production—which account for roughly 85% of the sector’s emissions. Activities covered include: 

• oil sands extraction and upgrading, 
• conventional oil production, natural gas processing, and 
• LNG production. 

As the world’s 4th-largest oil and 5th-largest gas producer, Canada aims to stay competitive in a decarbonizing global market. With demand for low-pollution fuels expected to grow, the emissions cap is positioned to help Canadian oil and gas producers adapt to shifting global demand while supporting national emissions targets.

As Canada targets a 40-45% emissions reduction below 2005 levels by 2030, it’s clear that the energy sector, which accounts for over a quarter of all emissions, is key to achieving its climate goal. 

Tug of War Over Emissions Limits

The cap on emissions, however, is being criticized by Alberta and the Canadian Association of Petroleum Producers (CAPP), who argue it’s essentially a production cap. They contend the policy could drive up prices, eliminate up to 150,000 jobs, and cost Canada’s economy up to C$1 trillion (US$720 billion). 

Alberta’s opposition reflects broader industry concerns that Canada could become the only major oil and gas-producing country capping emissions. They noted that this could potentially harm the nation’s competitiveness.

Greenpeace Canada’s Keith Stewart expressed that oil companies haven’t invested enough in pollution-reducing measures, underscoring the need for a strict cap. Conversely, Deloitte’s June analysis suggests that the cap may drive companies to cut production rather than adopt costly technologies like CCS, a solution proposed by some as a way to curb emissions without reducing output.

As the debate intensifies, it highlights the tension between ambitious climate policies and economic impacts on the energy sector and provincial economies. The final plan and its reception will be pivotal in shaping Canada’s climate and energy future.

• READ MORE: Canada Invests CA$6.6M to Boost Bioindustrial Innovation and Cut Carbon Emissions

The post Canada’s Emissions Cap for Oil & Gas: Will It Cut Carbon or Curb Production? appeared first on Carbon Credits.

On October 31, ENGIE North America (ENGIE) announced signing a deal to supply 260 MW of renewable energy to Meta from its Sypert Branch solar project in Milam County Texas.

Dave Carroll, Chief Renewables Officer and SVP of ENGIE North America remarked on the announcement,

“We are delighted to announce this agreement to work with Meta by providing renewable power that supports their growth and aligns with their net zero commitments. We are proud that ENGIE’s proven track record in developing, building and operating renewable assets puts us at the forefront of the energy transition and this agreement with Meta recognizes the importance of that track record to our customers.”

Unlocking the Meta-ENGIE Solar Deal

The deal was facilitated through Meta’s Environmental Attributes Purchase Agreement (EAPA) with ENGIE to secure renewable energy from the Sypert Branch solar project in Milam County, Texas. The project is located 70 miles northeast of Austin and just 10 miles from Meta’s Temple data center.

Meta will purchase 100% of the output from the 260 MW facility through this deal. The solar power will help meet its growing energy demands and support its ambitious net-zero goals. Notably, this agreement expands Meta’s renewable energy portfolio to over 12 GW worldwide.

Urvi Parekh, Head of Clean Energy at Meta said,

“We are delighted to be collaborating with ENGIE to make the clean energy transition a reality through projects like Sypert Branch. Since 2020, we have maintained net zero emissions in our global operations – these efforts are supported by relationships such as those with ENGIE who can consistently deliver and operate projects like Sypert Branch to help meet our energy needs.”

Meta’s Path to Net Zero: Leading with Renewable Energy

Meta achieved net zero emissions across its global operations in 2020.

Remarkably, the social media giant slashed emissions by 94% from a 2017 baseline. They achieved this by backing their data centers and offices with 100% renewable energy. Since 2018, these renewable energy efforts have mitigated Meta’s greenhouse gas emissions by over 12.3 million metric tons of CO₂e.

Source: Meta

100% Renewable Energy

Meta’s commitment to renewable energy is evident as it has partnered with the top utilities in the U.S. to integrate renewable energy into their systems. The goal is to benefit the company and its customers.

The tech giant has a portfolio of over 10,000 megawatts (MW) of contracted renewable energy projects. This makes Meta one of the largest corporate buyers of renewable energy worldwide. 

Earlier CarbonCredits reported:

• In the U.S., Meta boasts the largest operating portfolio, with more than 5,500 MW of renewable energy capacity currently online. Meta’s renewable energy projects represent an estimated $14.2 billion in capital investment for new infrastructure. 

Meta’s sustainability report further explains that it carefully selects projects on local grids near its data centers to help communities transition to clean energy. For centers in states like Virginia, Oregon, and New Mexico, Meta partners with utilities to establish “green tariffs.” This helps achieve 100% renewable energy within each utility’s territory.

• RELATED: Meta’s Bold Bet on Geothermal Energy and Carbon Footprint Reduction

Sypert Branch Solar Project: Boosting Economic and Community Growth

ENGIE developed the Sypert Branch solar project and will also construct and operate it by the end of 2025. The press release also highlighted that this deal brings ENGIE closer to its goal of nearly 1 GW in signed corporate PPAs in the U.S. in 2024 alone.

As a leading global renewable energy provider, ENGIE is widely recognized for its success in selling corporate energy PPAs. Overall, this project will add to Engie’s impressive renewable portfolio of 8 GW across North America, including solar, wind, and battery storage.

Furthermore, the Sypert Branch project is expected to transform the Milam County economy. The construction process itself can imbibe more than 300 workers and generate $69 million in tax revenue throughout the project timeline. ENGIE also noted that a significant part of this revenue will go toward developing schools in the district to support the local community.

• FURTHER READING: Engie Buys 5 Million Tons of Nature-Based Carbon Credits for Net Zero

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As climate change worsens, the UN’s 29th annual climate conference, a.k.a. COP29, taking place from November 11 to 22, 2024, in Baku, Azerbaijan, is a crucial chance to boost global efforts to tackle this problem. With the world experiencing severe weather events and record-high emissions, the summit will focus on vital topics like climate funding, national goals, and ways to deal with climate damage.

Nearly 200 countries will gather, and what happens here will shape international climate policies for years to come. Let’s break down all the important details you should know about this crucial climate talk. 

What Are the Main Goals of COP29?

COP29 is expected to be a major event for climate discussions, focusing on improving financial support for developing countries, increasing transparency, and setting strong climate goals. The summit aims to bring countries together to speed up the implementation of the Paris Agreement while tackling the intensifying impacts of climate change due to rising greenhouse gas (GHG) emissions.

Global Carbon Emissions in 2023

How Will Climate Funding Be Discussed at COP29?

Known as the “Finance COP,” COP29 will review climate funding for the first time in 15 years. The goal is to create a new target (NCQG) to replace the old goal of raising $100 billion annually by 2020, set during the 2009 Copenhagen Conference. 

• READ MORE about the previous COP here.

This new goal is important for helping vulnerable countries invest in clean energy and build resilience against climate impacts.

Negotiators will discuss key questions, like how much funding is needed, the timeline for achieving this goal, and what types of financial help are required. Initial talks suggest that the new goal could involve a mix of public and private funding sources. This creates a broad approach to climate finance.

A stronger climate funding goal will be vital for countries to enhance their climate commitments and create effective strategies. For instance, nations like India and Indonesia have stated that they need significant financial resources to meet their climate targets while still promoting economic growth.

Setting up reliable funding mechanisms will help build trust among nations, encouraging cooperation and dedication to global climate efforts.

What New Climate Goals Can We Expect at COP29?

Another important part of COP29 will be the expected announcements of new Nationally Determined Contributions (NDCs) ahead of the 2025 deadline. These contributions are essential for global efforts to fight climate change under the Paris Agreement. Major polluters, like Brazil, the UK, and the UAE, are likely to announce stronger goals for reducing GHG emissions.

Next-generation NDCs must set clear, ambitious targets for 2030 and 2035, which are critical for keeping global temperature rise within the 1.5 degrees Celsius limit. These commitments should include specific emissions reductions for different sectors, and guiding policies across energy, transportation, and agriculture. 

Clearly communicating these targets will also signal to investors the direction of climate finance, influencing funding toward low-carbon projects.

For example, the European Union plans to increase its climate ambitions, aiming for a 55% reduction in emissions by 2030. Similarly, the United States is expected to reaffirm its goal of achieving net-zero emissions by 2050, promoting significant investments in renewable energy and technological innovation.

How Will COP29 Address Loss and Damage?

As the climate crisis grows, some impacts go beyond what vulnerable countries can adapt to, making funding for “loss and damage” urgent. 

At COP28 in Dubai last year, the Fund for Responding to Loss and Damage was created to support developing nations hit by climate disasters. However, only $700 million has been pledged so far. That’s far less than the estimated $580 billion in damages vulnerable countries may face by 2030.

At COP29, developed nations are called upon to announce additional contributions to close this funding gap, ensuring that support reaches communities most affected by climate change. This funding is crucial for addressing immediate needs, such as rebuilding infrastructure and providing disaster relief, as well as long-term investments in resilience and adaptation.

For instance, countries like Pakistan and Bangladesh, which have faced severe floods and storms, require substantial international support to recover and strengthen their ability to withstand future climate impacts. Mobilizing resources for loss and damage will help these nations and reinforce the solidarity needed for effective global climate action.

What Is Needed to Close the Adaptation Finance Gap?

Closing the adaptation finance gap, estimated at $194-$366 billion per year, is another key goal for COP29.

Europe, in particular, faces substantial investment needs, requiring €800 billion for energy infrastructure by 2030 to meet its climate goals. By 2050, the region’s total green transition investment will need to reach €2.5 trillion, reflecting the scale of resources essential to achieve a sustainable and climate-resilient future.

Many developing countries are disproportionately affected by climate impacts but often lack the necessary financial resources to implement adaptation strategies. Countries have committed to doubling adaptation finance by 2025 as part of the Glasgow Climate Pact.

Negotiators will work to strengthen the Global Goal on Adaptation (GGA) at COP29 to ensure effective tracking of progress and financing. The GGA aims to enhance resilience and reduce vulnerability to climate impacts globally. 

Countries will be encouraged to share their experiences and best practices in adaptation, promoting a collaborative approach to tackle common challenges.

How Can Carbon Markets Be Used for Climate Action?

The summit will also look at international carbon markets under Article 6 of the Paris Agreement, allowing countries to trade carbon credits. Finalizing the rules for these markets is essential to ensure they help reduce global emissions effectively.

Carbon markets can motivate countries to cut emissions by allowing those with extra credits to sell them to those who need them. However, negotiators must resolve key issues regarding how credits are authorized and ensure environmental safeguards are in place. Clear guidelines on credit accounting and environmental integrity will be crucial for making these markets successful.

Countries like Costa Rica and Chile have already made significant progress in using carbon markets to fund their climate initiatives. Establishing solid carbon pricing mechanisms can drive investment in renewable energy projects and encourage sustainable practices across various sectors.

What Role Will Transparency Play at COP29?

COP29 will be a crucial moment for putting into action the enhanced transparency framework of the Paris Agreement. Countries must submit their first biennial transparency reports detailing their efforts to reduce emissions and their financial support needs. 

The Azerbaijani presidency has started the Baku Global Climate Transparency Platform to help developing countries manage this process. This platform aims to support capacity-building efforts and provide technical help to countries struggling with reporting requirements. 

Transparency is vital for building trust among nations and ensuring accountability in climate actions. By improving transparency, COP29 will create an inclusive environment where all countries can share progress, challenges, and lessons learned.

• READ MORE: Bank Of America Flags Liquidity Challenges in Carbon Markets: Will COP29 Usher in a New Era of Climate Finance?

How Will Non-State Actors Participate in COP29?

Another important part of COP29 will be the involvement of non-state actors, including businesses, civil society organizations, and indigenous groups. Their participation is crucial for driving climate action at local, national, and global levels. 

• The role of private sector investment in financing climate solutions is essential, so engagement from business leaders will be vital in shaping the discussions at COP29.

Events like the Climate Business Forum will give private sector actors platforms to showcase innovative solutions and collaborate with governments. Companies that have made strong climate commitments will be encouraged to share their best practices and engage in dialogues about scaling up their efforts.

How Will COP29 Address Climate Justice and Equity?

A key theme for COP29 will be addressing climate justice and equity. The effects of climate change are not distributed evenly; vulnerable communities often suffer the most from climate-related disasters despite contributing the least to greenhouse gas emissions. 

The summit must highlight the importance of fair climate action that prioritizes the needs of marginalized populations.

Discussions will likely focus on ensuring that climate funding reaches those most affected by climate change, including women, youth, and indigenous peoples. Involving these communities in decision-making will be vital for creating solutions that are effective and culturally relevant.

Can COP29 Create a Historic Opportunity for Climate Action?

COP29 presents a unique chance to raise global climate ambition and secure essential funding for sustainable development. A strong financial outcome will empower vulnerable nations to pursue low-carbon strategies while enhancing resilience to climate threats. 

The success of COP29 will rely on negotiators’ ability to overcome political divisions and prioritize the urgent need for climate action. By establishing a new climate finance goal, strengthening national commitments, addressing loss and damage, and improving transparency, COP29 can ignite meaningful progress in the global fight against climate change.

As the summit approaches, the world watches with hope and expectation, eager for this gathering of nations to produce the concrete actions and commitments needed to prevent the worst effects of climate change.

The post What is COP29 and Why Is It Hailed as The “Finance COP”? appeared first on Carbon Credits.

The lithium market has entered a period of price decline, mainly because of weaker demand conditions and an oversupply of lithium carbonate in key regions.

In October, seaborne lithium carbonate prices for Asia dropped by 3.8%, hovering around $10,000 per metric ton, according to S&P Global Commodity Insights analysis. 

The price dip reflects the seasonal winding down of demand typically seen at the end of the year when electric vehicle (EV) manufacturers prepare for a slowdown in post-peak sales. While September saw relative price stability, October’s downward shift reveals how the supply chain dynamics are pressing lithium markets. This is especially true in China’s case, which has been the dominant player in global EV sales in 2024. 

• The slowdown underscores the lithium market’s key issue: maintaining demand growth and stabilizing prices amid fluctuating EV sales patterns.

China’s lithium market, the largest globally, saw prices fall by 3.3% in October, settling at about 73,000 yuan per ton. While a brief rebound was observed toward the end of the month, prices continue to reflect the underlying pressures of oversupply. This surplus is compounded by high inventories and the slower-than-expected uptake in EV markets outside of China. 

The global market’s current inability to absorb excess supply effectively sets the tone for a persistent price slump, possibly extending into the next several years.

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Li-FT Power: Exploring & Developing Hard Rock Lithium Deposits In Canada

Li-FT Power Ltd. (TSXV: LIFT) recently announced its first-ever National Instrument 43-101 (NI 43-101) compliant mineral resource estimate (MRE) for the Yellowknife Lithium Project (YLP), located in the Northwest Territories, Canada.

An Initial Mineral Resource of 50.4 Million Tonnes at Yellowknife.

This maiden estimate is a major milestone for the company and marks a significant step forward in the project’s development. Li-FT Power’s upcoming mineral resource is expected to further solidify Yellowknife as one of North America’s largest hard rock lithium resources.

Click to learn more about lithium and Li-FT Power Ltd. >>

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Strategic Adjustments Among Lithium Producers

In response to these challenges, major lithium producers are taking action to manage costs and production levels. 

Companies like Sinomine Resource Group have opted to cut production in higher-cost regions. In Zimbabwe, for instance, Sinomine has minimized its petalite mining operations to prioritize spodumene extraction, which has a lower production cost. This shift reflects a broader industry trend, where companies focus on streamlining their operations to protect profit margins as market prices dip. 

Another significant strategic move within the industry was the recent acquisition of Arcadium Lithium by Rio Tinto. It is a substantial shift in the company’s approach to the lithium sector. This acquisition is particularly important for Rio Tinto as it extends the company’s footprint in lithium production beyond its existing projects in Serbia and Argentina, allowing it to target markets outside of China more effectively.

One of Arcadium’s main competitive advantages lies in its exploration of direct lithium extraction (DLE) technology. DLE can revolutionize the lithium market by unlocking reserves in brine deposits previously considered difficult to exploit using traditional methods. 

Presently, there are 13 DLE projects in operation, with total output projected to reach about 124,000 tonnes in 2024. According to Benchmark’s data, DLE technology can account for 14% of the global lithium supply by 2035, producing around 470,000 tonnes of LCE. This growth underscores the increasing role of DLE in meeting lithium demand for battery and EV markets.

Global Investments and Expanding Lithium Supply Chain

Investments in lithium production continue to grow despite the current market downturn, which signals optimism about long-term demand. 

In October, General Motors made a notable move by increasing its stake in the Lithium Nevada project to 38% with an additional $625 million investment. This initiative speaks of a long-term commitment to secure local lithium supplies. It aligns with the U.S. government’s strategic push to strengthen domestic EV battery production and reduce reliance on imports. 

The U.S. Department of Energy has already extended a substantial loan of $2.26 billion to support phase 1 construction of this project. The figure reveals the critical importance of domestic lithium resources for national energy goals. 

• READ MORE: U.S. DOE Approves $2.26 Billion for Nevada Lithium Mine
  

While traditional methods dominate current production, the lithium market is also increasingly exploring technological advancements. General Motors and other industry stakeholders are actively pursuing direct extraction methods to unlock challenging lithium deposits. 

By experimenting with DLE, the U.S.-based Lithium Nevada project aims to reduce environmental impacts and shorten production timelines. These technological investments indicate that despite current pricing challenges, there’s confidence in lithium’s long-term demand potential. More so as EV adoption grows and global green energy transitions accelerate.

Long-Term Market Forecast and Expected Price Recovery

Looking ahead, lithium prices could remain in a tight range. S&P Global Commodity Insight’s forecasts suggest that the price of lithium carbonate will stay between $9,924 and $11,627 per metric ton until 2026. This projection reflects the industry’s cautious outlook as companies expect that demand growth will take time to balance the current surplus. 

• Analysts predict that a substantial price recovery may not materialize until 2028, with a forecasted rise to $14,659 per metric ton, or about a 20.8% increase, as the market finally shifts into a deficit.

The expected long-term supply shortage is largely tied to the anticipated increase in EV adoption and the renewable energy transition. Both of these demand drivers require significant lithium resources. 

However, automakers worldwide are adjusting their production strategies to balance profitability with sustainable growth. This brings uncertainty to the exact timing of the demand shift that will absorb today’s excess supply.

In summary, the lithium market in 2024 reflects a complex blend of challenges and opportunities. Prices remain low due to oversupply and fluctuating EV demand, especially outside of China, but the long-term outlook for lithium still holds promise.

The lithium industry’s ability to adapt to today’s market conditions will shape the future landscape of this essential resource, ensuring its place in the global shift toward a sustainable energy future.

• SEE MORE: Li-FT Power: Exploring & Developing Hard Rock Lithium Deposits In Canada

The post Can the Lithium Market Overcome Falling Prices and Weak Demand in 2024? appeared first on Carbon Credits.