Kevin J. Lambie Robin Squires Beverley Moore Alan Ross July 25 2022 2030 Emissions Reduction Plan and Canada's journey to net zero: part one Borden Ladner Gervais LLP | Environment & Climate Change - Canada Kevin J. Lambie, Robin Squires, Beverley Moore, Alan Ross Environment & Climate Change IntroductionKey highlightsContextIntroductionOn 29 March 2022, the government of Canada (the federal government) delivered its 2030 Emissions Reduction Plan (the Plan). The Plan outlines current and new policies by the federal government to meet its greenhouse gas (GHG) reduction targets and, in some cases, associated funding. This article is the first in a three-part series that outlines certain strategies of the Plan (supplemented by the recent federal budget) to further Canada's transition toward a low carbon economy.Key highlightsKey highlights of the Plan include:clean fuels – accelerated year-to-year carbon intensity reductions are being proposed, including an annual reduction of 1.5% carbon intensity instead of the previously planned 1.2% annual reductions;buildings – regulation through building codes can help affect the changes needed to decarbonise the buildings sector, since much of the technology needed to achieve decarbonisation of the buildings already exists;electricity – the electricity sector will be net-zero by 2035;oil and gas – the federal government has expressed its commitment to cap and cut emissions from the oil and gas sector at a pace required to achieve net-zero by 2050.transport – Canada has reiterated that it will set gradually increasing annual targets for sales of passenger zero emissions vehicles by original equipment manufacturers, culminating with a 100% target by 2035; andsustainable finance – Canadian regulators are assessing current frameworks, and after extensive consultations, signalling new rules in the near future.Figure 1 summarises the planned emission reductions per sector targeted by the federal government.Figure 1: planned emission reductions per sectorContextCanada's international commitmentsAs signatory to the Paris Agreement, Canada has legally binding obligations to meet its stated emissions reduction targets. The national GHG reduction targets under the Paris Agreement are set out in a country's nationally determined contributions (NDC), a document that must be submitted by all signatories. Canada updated its NDC in July 2021 ahead of the Conference of Parties 26 and shortly after the United States released its updated NDC.(1) As a result, Canada's current emissions reduction targets under the Paris Agreement equate to:40 to 45% below 2005 levels by 2030 (approximately 406.5-443.4 metric tons of carbon dioxide equivalent (CO2e)); andnet-zero emissions by 2050.Each NDC outlines the sectors covered, the associated GHG emissions reduction targets and activities that will be taken by a country to meet such targets. NDCs follow a pre-determined format and provide only high-level details regarding scope (certain sectors may be omitted entirely from the NDC) and activities. The detail to achieve the targets is left to respective governments to develop and is not submitted under the Paris Agreement. The Plan is the detailed plan meant to reflect Canada's NDC.At a national level, the federal government has also implemented the Canadian Net-Zero Emissions Accountability Act. Among other functions, the Act sets legal requirements for current and future governments to plan, report and review strategies to achieve net-zero emissions by or before 2050. Further, the Act legislates obligations substantially similar to those under the Paris Agreement, such as article 4, which requires member nations to deliver their NDC.Plan overviewThe Plan outlines the federal government's existing strategies to reduce GHG emissions as well as new measures to accomplish the reductions, and associated funding. The Plan supplements Canada's biennial reports to the United Nations Framework Convention on Climate Change, the fifth of which is expected in December 2022. The Plan also builds on the federal government's two previous climate change plans, issued in 2016 and December 2020, respectively.(2)The Plan cites analysis that 730 metric tons of CO2e were emitted across Canada in 2019. Oil and gas and transport continue to be Canada's largest sectoral emissions sources. Significant emissions were attributable to other classifications such as buildings, heavy industry, waste and agriculture. Figure 2 illustrates the relative proportions of GHG in Canada by source, while Figure 3 provides the numeric values of each sector's emissions reduction targets. The Plan notes action items to reduce these carbon emission sources and help companies realise these opportunities, including regulatory changes to nudge incentives and spur investment (eg, sustainable finance).Figure 2: emissions contributions by sectorFigure 3: emissions reductions by sectorFor further information on this topic please contact Kevin J Lambie, Robin Squires, Beverley Moore or Alan Ross at Borden Ladner Gervais LLP by telephone (+1 416 367 6000) or email ([email protected], [email protected], [email protected] or [email protected]). The Borden Ladner Gervais LLP website can be accessed at www.blg.com.Jonathan Cocker, Peyman Ghaemi, Justin Cuperfain, Kristyn Annis, Sarah Sweet, Tanner Shapka and Luca Vita assisted in the preparation of this article.Endnotes(1) Under the Paris Agreement, signatories are required to ratchet up the GHG emissions reduction targets under their respective NDC every five years.(2) Canada has issued two previous climate change plans:Pan-Canadian Framework on Clean Growth and Climate Change (2016); andA Healthy Environment and a Healthy Economy (Dec 2020).