Canada’s federal government is considering abandoning its planned cap on oil and gas emissions as part of a new climate policy, according to sources familiar with ongoing discussions. Talks between Prime Minister Mark Carney’s administration, Alberta officials, and major energy producers suggest the cap could be scrapped if the industry commits to alternative emissions-reduction measures.

The emissions cap, first proposed under Justin Trudeau’s government and scheduled for 2030, has yet to be legislated. Oil companies have strongly opposed the measure, arguing it would curb production and weaken competitiveness. While Carney campaigned on maintaining the cap, his government’s tone has shifted in recent weeks, with insiders pointing to a more flexible approach.

Officials indicate the new “climate competitiveness strategy,” expected later this autumn, will prioritize measurable emissions reductions and investment in technologies like carbon capture and storage (CCS) over strict regulatory limits. Canada’s Natural Resources Minister Tim Hodgson emphasized that the government is “focused on results, not how we get there.”

The oil and gas sector is Canada’s largest emitter, driven by rising oil sands production. Without deeper decarbonization, Ottawa risks falling short of its international pledge to cut greenhouse gases by 40-45% from 2005 levels by 2030.

Carney has pledged to position Canada as a global “energy superpower,” balancing clean energy expansion with support for conventional oil and gas. The evolving strategy also seeks to ease long-strained relations with Alberta by aligning climate goals with economic growth.