Canada, Alberta strike deal to cut methane emissions in oil and gas sector

The proposed framework would allow Alberta to implement its own performance-based system, including regulations, offset credits and targeted investments, while Ottawa works toward an equivalency agreement under the Canadian Environmental Protection Act, 1999.

Under such an arrangement, federal methane regulations would not apply in the province as long as comparable emissions reductions are achieved.

The agreement builds on a memorandum of understanding signed in November 2025 and is aimed at reducing greenhouse gas emissions while maintaining energy production.

Methane, a potent greenhouse gas with a significantly higher warming impact than carbon dioxide, is a key focus of Canada’s climate strategy.

Officials say cutting methane emissions is among the most cost-effective ways to achieve near-term emissions reductions.

The agreement also outlines measures to improve transparency, including public reporting on emission sources and Alberta’s mitigation efforts, and calls for independent third-party modelling to assess progress.

Both governments said corrective action would be taken if emissions targets are not met.

Photo: PMO Canada

Once finalized, the equivalency agreement will undergo a 60-day public consultation, with implementation targeted by Jan. 1, 2027, for a 10-year period. Alberta’s current agreement with the federal government will remain in place until a new deal is completed.

Canadian Prime Minister Mark Carney in a statement said that the partnership would help cut emissions while supporting jobs and economic competitiveness.

“Canada is strongest when we work together,” Carney said.

Alberta Premier Danielle Smith said the deal would allow the province to continue managing its energy sector while reducing emissions.

“This agreement reflects that approach and builds on a system that is already delivering results,” Smith said.

Officials said further work on the agreement will continue in the coming weeks