Canada, Alberta Reach Methane Agreement to Cut Emissions and Support Energy Sector

Announced March 25, the proposed framework targets a 75 per cent reduction in methane emissions below 2014 levels by 2035 in Alberta—one of Canada’s largest energy-producing provinces.

Performance-Based Approach to Emissions Reduction

Under the agreement, Alberta would implement a performance-based system combining regulations, offset credits, and targeted investments to reduce methane emissions. In turn, the federal government intends to pursue an equivalency agreement under the Canadian Environmental Protection Act, 1999, which would allow federal methane regulations to be stood down in Alberta if equivalent emissions reductions are achieved.

The framework includes commitments to:

• Develop a pathway to meet the 2035 emissions target
• Use an independent third party to model and assess emissions reductions
• Increase transparency through public reporting on emissions sources
• Implement corrective measures if targets are not met

If finalized, the agreement would undergo a 60-day consultation period before implementation, with a target start date of January 1, 2027, and a 10-year duration.

Canada is strongest when we work together.

Today, Canada and Alberta reached an agreement to lower methane emissions in the oil and gas sector — to create good jobs, cut pollution, and help position Canada as the world’s supplier of choice for responsibly-produced energy.

— Mark Carney (@MarkJCarney) March 25, 2026

Balancing Climate Goals and Economic Growth

Methane is considered a high-impact greenhouse gas, with a warming effect significantly greater than carbon dioxide over the short term. Reducing methane emissions is widely viewed as one of the most effective ways to achieve near-term climate benefits while maintaining oil and gas production levels.

According to the federal government, nearly one-quarter of emissions from Canada’s oil and gas sector are methane. Since 2014, emissions have already declined by 40 per cent while production has continued to grow.

The agreement builds on a November 2025 Memorandum of Understanding between Canada and Alberta, which focuses on achieving net-zero emissions by 2050 while supporting job creation and energy sector growth.

Industry Certainty and Clean Tech Growth

Officials say the proposed equivalency agreement is designed to provide regulatory certainty for industry while encouraging innovation. Canada’s enhanced methane regulations, finalized in December 2025, are projected to deliver 304 million tonnes of greenhouse gas reductions between 2028 and 2040.

The clean technology sector is also expected to benefit. More than 130 methane mitigation firms are currently operating in Canada, with dozens established over the past decade.

Broader Federal-Provincial Collaboration

The methane agreement aligns with broader efforts to streamline project approvals and strengthen Canada’s energy sector. Earlier this month, Canada and Alberta released a draft co-operation agreement on environmental and impact assessments, introducing a “one project, one review” model for major infrastructure projects.

Both governments say continued collaboration is essential to balancing environmental responsibility with economic competitiveness.