Fueling the transition: Categorizing emissions-reducing oil and gas projects according to Canada’s Climate Investment Taxonomy

The Canadian Climate Institute examines how to integrate oil and gas decarbonization projects into a proposed national Climate Investment Taxonomy. While most global taxonomies focus on 'green' labels for net-zero activities, the authors advocate for a 'transition' category to unlock funding for hard-to-decarbonize sectors. The paper suggests a high-bar approach using specific criteria to ensure projects align with 1.5°C pathways and avoid carbon lock-in, focusing on three key areas: Scope 3 emissions risks, the distinction between new and existing facilities, and the alignment of project lifespans with climate targets.

• Canada requires an annual increase in private and public investment for clean growth projects between $80 billion and $110 billion to achieve its climate targets.
• Unlike the taxonomies of over 30 other countries that primarily define 'green' investments, the framework developed by the Canadian Climate Institute introduces a 'transition' category designed to fund the rapid decarbonization of emissions-intensive sectors like oil and gas.
• To determine eligibility for the transition label, the authors propose focusing on three specific analytical questions: the impact of downstream Scope 3 emissions as a dominant transition risk, the definition of new versus existing facilities, and the alignment of project lifespans and emissions reductions with 1.5°C pathways.
• The paper argues for a high eligibility bar for oil and gas projects to prevent carbon lock-in and ensure Canada remains on a trajectory to meet its climate goals.

APA

Canadian Climate Institute (2024). Fueling the transition: Categorizing emissions-reducing oil and gas projects according to Canada’s Climate Investment Taxonomy. https://climateinstitute.ca/publications/fueling-the-transition-categorizing-emissions-reducing-oil-and-gas-projects-according-to-canadas-climate-investment-taxonomy/

Chicago

Canadian Climate Institute. Fueling the transition: Categorizing emissions-reducing oil and gas projects according to Canada’s Climate Investment Taxonomy. 2024. https://climateinstitute.ca/publications/fueling-the-transition-categorizing-emissions-reducing-oil-and-gas-projects-according-to-canadas-climate-investment-taxonomy/.

Wikipedia

{{cite report |author=Canadian Climate Institute |title=Fueling the transition: Categorizing emissions-reducing oil and gas projects according to Canada’s Climate Investment Taxonomy |date=23 January 2024 |url=https://climateinstitute.ca/publications/fueling-the-transition-categorizing-emissions-reducing-oil-and-gas-projects-according-to-canadas-climate-investment-taxonomy/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{canadianclimateinstitute2024fueling, author = {{Canadian Climate Institute}}, title = {{Fueling the transition: Categorizing emissions-reducing oil and gas projects according to Canada’s Climate Investment Taxonomy}}, institution = {Canadian Climate Institute}, year = {2024}, month = jan, url = {https://climateinstitute.ca/publications/fueling-the-transition-categorizing-emissions-reducing-oil-and-gas-projects-according-to-canadas-climate-investment-taxonomy/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }