Minister Wilkinson Refocuses Emissions Reduction Fund Onshore Program

December 21, 2021                                                  Ottawa, Ontario                                     Natural Resources Canada

Methane is responsible for approximately 30 percent of the global rise in temperatures to date and accounts for approximately 13 percent of Canada’s total greenhouse gas emissions. Cutting emissions from methane is one of the fastest and lowest-cost ways to fight climate change and is one of the top recommendations made by climate scientists in the most recent report of the Intergovernmental Panel on Climate Change.

In 2020, Canada’s oil and gas sector experienced an unprecedented economic downturn as COVID-19 shut down the world economy. The Government of Canada responded decisively, designing and launching the Emissions Reduction Fund (ERF) to sustain jobs in oil-producing regions while simultaneously ensuring that work on cutting methane emissions continued despite the economic crisis.

The ERF Onshore Program will achieve important progress in reducing methane emissions and fighting climate change. Companies have been approved for up to $134 million in ERF funding to support 81 projects that are anticipated to result in reductions of 4.6 megatonnes of carbon dioxide equivalent in the first year following project completion — comparable to removing one million passenger vehicles from our roads for one year. Small and medium-sized companies as well as communities across Western Canada including Estevan, Saskatchewan; Brandon, Manitoba; and Slave Lake, Alberta — where projects are underway — have been able to benefit directly from this program.

Since launching the ERF in fall 2020, Canada has committed to even more ambitious climate action, including a new target to reduce methane emissions in the oil and gas sector by at least 75 percent by 2030 and capping and reducing emissions from the oil and gas sector in line with our climate goals.

Today, the Honourable Jonathan Wilkinson, Minister of Natural Resources, announced that the ERF Onshore Program will be refocused to better support the government’s ambitious climate change goals.

The changes to the program being announced reflect both the much-improved economic situation in Canada’s oil and gas sector since 2020; lessons learned through the first two intakes of the program; the recent audit of the program prepared by the Commissioner of the Environment and Sustainable Development (CESD); supportive comments on the program from environmental non-governmental organizations; and supportive cooperation from the industry.

The revisions announced today will support further significant reductions in support of Canada’s ambitious targets. This includes:

• Narrowing the scope of funded projects to only those that fully eliminate intentional routine venting and flaring of methane;

• Applying strengthened criteria to make sure we are funding projects that provide the greatest return on investment from an emissions reductions perspective, including through establishing a cost per tonne threshold; and

• Providing greater transparency and ensuring that projects demonstrate emissions reductions that are incremental to Canada’s methane regulations.

A revised third intake period for the program will open in January 2022 and will remain open until March 31, 2022, to provide extra time to the companies coming into the program to collect additional application material and comply with new requirements. A new applicant’s guide will be made public in January 2022 with revised application requirements. Program updates will be made available on the ERF Onshore Program website, and interested applicants may also subscribe to the ERF Onshore Program mailing list.

This next phase of the ERF will build on progress toward Canada’s 2025 target as outlined by Environment and Climate Change Canada in its recently released review on federal actions to reduce oil and gas methane emissions. This review concluded that Canada is on track to meet its 2025 targets. However, it acknowledges that more work is needed to drive further reductions in this sector. This third ERF intake targets further reductions beyond those assumed in the methane regulations.