Environment minister's comments on carbon credits 'frustrating,' says CAPP boss

The Calgary-based head of the Canadian Association of Petroleum Producers says he’s frustrated with comments made by Canada’s environment minister ahead of this week’s global climate conference in Madrid.

Industry hopes LNG exports count toward Canada's emission targets under Article 6

A man in a suit gestures with his hands as he speaks.
Canadian Association of Petroleum Producers president and CEO Tim McMillan is pushing the Canadian delegation at the climate talks in Madrid to work to enable Article 6 of the Paris Agreement. (Justin Tang/The Canadian Press)

The Calgary-based head of the Canadian Association of Petroleum Producers says he's frustrated with comments made by Canada's environment minister ahead of this week's global climate conference in Madrid.

Speaking to the Globe and Mail, Environment Minister Jonathan Wilkinson appeared to pour cold water on the energy industry's hope that clean-burning liquefied natural gas (LNG) exported from Canada will count toward Canada's emissions targets through international co-operation provisions under Article 6 of the 2015 Paris Agreement.

However, the details of Article 6 weren't finalized in Paris or the subsequent 2018 meeting in Poland, but instead were left to be hammered out at this year's conference of the parties to the United Nations Framework Convention on Climate Change (COP25) in Spain.

Wilkinson said the Liberal government's aim is to reach Canada's emission reductions targets through domestic cuts, not by relying on credit-trading within Article 6.

But Tim McMillan, head of the Canadian Association of Petroleum Producers (CAPP), says Article 6 represents an important opportunity for Canadian energy to be part of the global fight to reduce greenhouse gas emissions.

"You know, I found his comments somewhat frustrating," he said.

"We've done a lot of work with his officials and with former ministers of the government, some of which were very positive."

McMillan said that because Canada can boast of the lowest-emission natural gas and liquefied natural gas in the world, the country is uniquely positioned to help China, India and other countries transition away from much dirtier coal-fired electricity production.

"As Minister Wilkinson comes to this conference of the parties here in Madrid, I hope he gets a strong briefing and positions himself as a real advocate for enabling Article 6 and enabling Canadian natural gas to be a global solution," he said.

McMillan added that it's vital for the 200 or so countries taking part in the climate talks to come up with globally-based solutions.

"If there is a flaw to the Paris Agreement, it is that each country has a box around it. And no matter what you do inside your box, you can't have a global view," he said.

"Globally, we're building one coal fired power plant a week. If they have access to natural gas, they most certainly would want not just the gas but access to some of those credits."

McMillan said if the delegates in Madrid are unable to agree to a framework for Article 6, Canada should take the lead in negotiating an international set of rules for sharing in emissions reductions.

"They would have to be strict in how they assess what is a real carbon credit, they'd have to be credible in how accounting is done so that others can follow the work," he said.

"But without it, we are going to lose globally. And to look at this problem just within Canada's borders is somewhat myopic because Canada only makes up 1.5 per cent of global emissions."

Speaking at the Canadian Club in Ottawa on Monday, Alberta Premier Jason Kenney also touted the possible benefits of Article 6 in combating climate change.

"I understand that, if we were to fully satisfy the future demand for LNG in China and India, to allow them to convert off of high-emitting coal, to much lower-emitting natural gas, that the incremental reduction in their CO2 output would be equivalent to the entire Canadian economy's GHG output," he said.

"I hope that the federal government will seek to get credit for that kind of export through Article 6 of the Paris Agreement. We'd like to work with them on that."