Defining oil and gas projects' climate impact

The Canadian Climate Institute argues that for Canada to meet its net-zero goals, the oil and gas sector requires transformational investment. It proposes a two-tier requirement system for the federal government's Sustainable Finance Action Council (SFAC) climate investment taxonomy: company-level net-zero targets and project-level emissions-intensity benchmarks. Specifically, it argues that "transition" labels should only apply to projects that reduce emissions from existing production, as 1.5°C pathways necessitate "no investments in new production."

• The proposed climate investment taxonomy by the Sustainable Finance Action Council (SFAC) uses two labels to guide financial markets: a "green" label for projects intuitively aligned with net-zero (such as wind, solar, and clean hydrogen) and a "transition" label for high-polluting sectors including steel, cement, aluminum, chemicals, and oil and gas.
• To ensure the "transition" label remains credible and science-based for the oil and gas sector, the author proposes that companies must first meet general requirements, including having credible net-zero targets that cover the entire supply chain, including customer combustion emissions, and disclosing plans to transition to less emission-intensive businesses.
• Project-level eligibility for the "transition" label should be restricted to those that reduce emissions from existing production and align with 1.5°C pathways. The author asserts that staying consistent with the 1.5°C target means there should be "no investments in new production."
• The author proposes using an emissions-intensity benchmark based on the Canada Energy Regulator’s Global Net Zero Scenario to determine if a project is consistent with 1.5°C pathways, requiring projects to demonstrate how investments will keep them below this benchmark over time.
• The document suggests that the federal government should establish a new independent institution to provide the necessary governance and resources to develop official criteria and thresholds for the national taxonomy.

APA

Canadian Climate Institute (2023). Defining oil and gas projects' climate impact. https://climateinstitute.ca/defining-oil-gas-projects-climate-impact/

Chicago

Canadian Climate Institute. Defining oil and gas projects' climate impact. 2023. https://climateinstitute.ca/defining-oil-gas-projects-climate-impact/.

Wikipedia

{{cite report |author=Canadian Climate Institute |title=Defining oil and gas projects' climate impact |date=12 July 2023 |url=https://climateinstitute.ca/defining-oil-gas-projects-climate-impact/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{canadianclimateinstitute2023defining, author = {{Canadian Climate Institute}}, title = {{Defining oil and gas projects' climate impact}}, institution = {Canadian Climate Institute}, year = {2023}, month = jul, url = {https://climateinstitute.ca/defining-oil-gas-projects-climate-impact/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }