Canada’s uncounted emissions

While Canada claims to be a climate leader, the oil and gas we export to other countries have the potential to produce more emissions in a year than every sector in Canada combined, an independent analysis reveals.

Canada’s oil and gas industry is ramping up, despite evidence that unabated production from the world’s existing fossil fuel infrastructure will warm the planet beyond 1.5 C.

Achieving global net zero emissions by 2050 requires a rapid shift away from fossil fuels and no investment in new fossil fuel supply projects, according to the International Energy Agency.

But Canada is generating record-breaking volumes of oil, approving new extraction projects and is on the cusp of launching a liquified natural gas (LNG) export hub in British Columbia.

While the federal government plans to cap emissions from the drilling and refinement of oil, that’s not where the bulk of the industry’s emissions come from.

Canada exports most of its crude oil and just under half of its natural gas. That’s important to note, because 70 to 80 per cent of emissions from most oil companies come from their products’ use — like the gasoline that fuels cars and the oil that heats homes, according to the Pembina Institute, an independent Canadian think-tank.

As Canada cuts back on emissions at home, how much are its exports contributing to global emissions?

The answer comes down to how they are counted.

Canada’s reported national greenhouse gas emissions in 2022 climbed to 708 megatonnes of CO₂ equivalent. That’s 708 million metric tonnes of emissions released within the country’s borders.

The country’s method for emissions counting is in line with the standards set by the United Nations Framework Convention on Climate Change, which avoids double-counting between countries.

But national, or domestic, emissions tallies only show perhaps half of the story for major oil and gas exporting nations, said Zurich-based climate policy analyst Frederic Hans.

That’s because emissions released from the combustion of exported fossil fuels are counted by the country that imports them, not the country that exports them.

Hans, who works with the Climate Action Tracker, an international research project, agreed to share CAT’s never-before-seen analysis of Canada’s exported emissions.

If all of Canada’s oil and gas exports were burned, 939 megatonnes of carbon dioxide is a rough estimate of how many emissions would be released.

Though the real emissions produced by exported oil and gas may be higher or lower, the estimates provide an idea of the magnitude.

Domestic greenhouse gas emissions of CO₂e (Includes carbon dioxide, methane and nitrous oxide)

708 Mt

Estimated CO₂ emissions from oil and gas exports (Carbon dioxide only)

939 Mt

= 10 megatonnes (Mt)

Estimated emissions from Canada’s oil and gas exports in 2022 were about 1.3 times more than its domestic emissions.

In other words, oil and gas exports have the potential to produce more emissions than every sector combined across the country.

Let’s zoom out to see how Canada’s domestic and exported emissions compare over time.

The experts CBC News spoke with said CAT’s estimates generally reflect what they would expect: while domestic emissions are levelling off, emissions from Canada’s oil and gas exports are growing and increasingly outweigh Canada’s official count.

Jessica Kelly, a Winnipeg-based senior policy advisor with the International Institute for Sustainable Development, said Canada should be looking at its exported emissions even if it isn’t required to.

I think Canada has this image of being the cowboy in the white hat on the world stage, she said. We can point to our own domestic emissions reductions. We can point to our own climate policies and say we're doing a really good job in this regard, but if we're exporting our emissions to other jurisdictions … then that clean-cut image for Canada comes under some scrutiny.

Environment and Climate Change Canada told CBC News that its emissions reporting is aligned with international standards and that it is always looking for ways to better measure emissions.

In terms of its domestic emissions, Canada appears to be on track to reach its 2030 national emissions target, assuming climate measures including its carbon tax and cap-and-trade system are as effective as promised.

At the same time, Hans said Canada is contributing to a global economy that runs on fossil fuels instead of supporting decarbonization.

Yet Canada is not unique among major oil and gas exporting nations.

As a comparison, CAT provided exported oil and gas emissions estimates for the United States, the world’s largest oil and gas producer, and Norway, another major producer and exporter.

Hans said all wealthy, developed nations should be thinking beyond their borders.

Exporting nations, particularly developed countries … should be the ones, actually, that spearhead the transition to a low-carbon economy, he said.

If the world makes rapid and significant cuts to greenhouse gas emissions and transitions away from fossil fuels, it’s still possible to prevent global warming from exceeding 1.5 C.

But as long as other countries are willing to combust fossil fuels, the Canadian oil and gas industry is willing to sell it to them.

In fact, the oil and gas industry is preparing to expand its market to become a global energy supplier.

CBC News asked Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers (CAPP), whether the industry considers itself responsible for emissions released by its products once they leave Canadian soil.

In a reply via email, Baiton said that Canadian oil and gas can meaningfully contribute to decarbonization efforts by lowering global emissions as an alternative to coal and other higher-emitting sources.

Canadian-produced natural gas and Canadian offshore oil both rank among the lowest-emission intensive sources in the world, while the emissions intensity of oil sands is going down consistently, Baiton said.

In fact, total emissions for Canada’s oil and gas sector increased 83 per cent between 1990 and 2022, according to the national greenhouse gas emissions inventory. A 2023 IEA report ranks Canada’s oil and gas sector as the seventh-least-intensive among major oil and gas producers.

Plus, global demand for Canadian fossil fuels could actually drop in the long term, according to projections from the Canada Energy Regulator.

Kelly with the International Institute for Sustainable Development said the U.S. is already preparing for that future.

At this point, Canada is launching itself into a weakened market. President Biden, south of the border, has put a pause on aggressive LNG expansion in the U.S, Kelly said.

Ross Linden-Fraser, a senior research associate at the Canadian Climate Institute, agreed that the fossil fuel market is a limited opportunity.

If countries continue combusting oil and gas at the levels they do [now], there is no path to net zero, which is why we know that demand for those products is going to fall in the future.

Linden-Fraser said regardless of where emissions are counted and by whom, it all comes down to one thing.

In the big picture, what matters is what the atmosphere sees, he said.