Canada has unveiled new regulations to outlaw some fossil fuel subsidies, reported Bloomberg, citing Canadian Environment Minister Steven Guilbeault.
The new rules will focus on subsidies that favour oil and gas production unjustly, only support industry operations, or encourage the use of fuels that exacerbate climate change.
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Guilbeault touted that the action marks the first fulfilment among the Group of 20 (G20) nations of a climate pledge made in 2009.
“This is a fundamental shift from what we’ve done in this country for decades,” he was quoted by the agency as saying.
In 2009, the G20 leaders committed to “rationalise and phase out over the medium-term inefficient fossil fuel subsidies”.
Canada, the US, and Mexico pledged in 2016 to finish the phase-out by 2025.
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By GlobalDataSince then, the government of Prime Minister Justin Trudeau has moved the deadline to 2023, and this week it announced how it would define a prohibited fossil fuel subsidy.
According to the framework, a fossil fuel subsidy will be prohibited if it favours the industry excessively or only promotes fossil fuel-related activity or consumption.
It must also satisfy the definition of a subsidy as set forth by the World Trade Organisation that stands for a grant from the government, a kind of financial assistance, or a price reduction that benefits the receiver.
However, the government excluded subsidies for clean energy, clean technologies and renewable energy sources as well as those that significantly lower national or global emissions.
Additionally, subsidies that support indigenous economic participation, and provide distant areas with vital energy as well as those that offer temporary emergency assistance in times of need, are exempted.
It also excluded subsidies for projects with a convincing plan to attain net-zero emissions by 2030 or for production methods that generate less emissions.
Canada will present its framework for evaluation to other G20 countries and the process is scheduled for completion in 2024.
