Alberta and Ottawa are searching for ways to claim credit for potentially reducing greenhouse gas emissions in countries that swap their coal-fired power plants with Canadian gas, documents obtained by Canada's National Observer reveal.

Energy discussions between Canada’s largest oil-producing province and the federal government are taking place over the next year. A draft text of the working group’s terms of reference shows the two sides, which are usually at odds over climate policy, are teaming up to explore how to use Article 6 of the Paris Agreement to the fossil fuel sector’s advantage.

Article 6 is a section of the landmark climate accord that allows countries to trade carbon offset credits (essentially, selling emission reductions in one jurisdiction to another). It’s a path to achieving net-zero greenhouse gas emissions that’s filled with potential issues, from the risk of double counting emission reductions to undermining the energy transition off fossil fuels by creating offsets that look good on paper, but turn out to be worthless in the real world. Nonetheless, genuine carbon offset credits may be a way to help curb planet-warming greenhouse gas emissions if designed and implemented properly. Last year, Canada launched a carbon credit trading system.

Enter Alberta and the federal government. According to the draft text, the two governments are exploring how Article 6 could be used to help Canada and Alberta claim credit for lowering emissions by exporting liquefied natural gas (LNG) — a fossil fuel that, in some cases, isn’t much cleaner than coal.

The move would upend a key part of the Paris Agreement, which states countries are responsible for emissions within their own borders. It’s that principle that allows Canada to ignore emissions caused by fossil fuel exports when they are burned abroad and rationalizes the continued production of fossil fuels while claiming to be on a path to net zero: When the exported fuel is burned, the emissions are the responsibility of whichever country imports them.

Now, Alberta and Canada will argue they should receive emission reduction credits for LNG exports because when countries replace coal with Canadian LNG, emissions could drop.

Canada would still have to negotiate with other countries to receive the emissions reduction credits, but experts interviewed by Canada’s National Observer poured cold water on the plans. They point out countries like China, where much of Canadian gas is slated for export, will want to claim the emissions reductions for themselves.

Convincing them to give up that credit would likely come at a steep price, said Aaron Cosbey, a senior associate with the International Institute for Sustainable Development, adding it “would be a radical departure from norms.”

Moreover, it would create precedents that could backfire on Canada, like creating space for China to argue it should get emission reduction credits when Canadian companies install Chinese-made solar panels.

Canada and Alberta are discussing carbon offset credits in a way that if the country tried to discuss it in the United Nations system, it would be “laughed out of the room.” #cdnpoli

A spokesperson for federal Natural Resources Minister Jonathan Wilkinson confirmed the agenda item is on the table. Canada is exploring every avenue to reach its climate commitments, the spokesperson said.

“There is interest among Canadian industry to see if Article 6 can be operationalized in order to displace coal abroad with Canadian LNG,” the spokesperson said. But Canada’s position is that there should be conditions for these discussions: an LNG project’s domestic emissions would still have to fit within Canada’s targets, for example, and it can’t be assumed “that exported LNG is in fact displacing coal” given countries could just add gas on top of existing coal plants.

Similarly, a spokesperson for Alberta’s Environment Minister Rebecca Schulz said carbon credit trading under Article 6 was a “significant opportunity” for companies to play a role in the emission reduction goals of governments.

Experts interviewed by Canada’s National Observer said the plan being pitched by Alberta and the feds has for years been a goal of the fossil fuel industry because it allows companies to continue profiting from their products even as policies to phase out fossil fuels are ramped up globally.

“The Canadian gas industry has been fantasizing about using Article 6 to greenwash its LNG exports for many years now, and is now being carried forward by its political lackeys in the Albertan government,” Climate Action Network Canada executive director Caroline Brouillette said.

“It's confusing that the Canadian government would accept this as a topic for discussion given that the idea still does make zero sense — both from an emissions reduction perspective and in terms of how the Paris Agreement actually works.”

Cosbey said the gas industry’s primary goal is to delay decarbonization “in the hopes they’ll get a more sympathetic government.”

Bluntly speaking, he added, if Canada tried to discuss this with other countries in the United Nations system, it would be “laughed out of the room.”

The fact Alberta and Canada are even discussing this is “an exercise of mutually agreed suspension of disbelief,” Cosbey said.

Both governments know it’s likely a dead end, but discussing it offers both sides political cover, he explained. For the federal government battling premiers hostile to its goals, “they’re desperate for anything” that makes them look like a team player. For the provincial government, “they also know it can’t happen, but they want it in there because it gives them cover and time,” he said.

“Instead of having to move quickly on trying to decarbonize Alberta's oil and gas sector … [the Alberta government] can say, ‘Don't worry about it, this stuff is clean, and we're going to get credits for it,’” he said. “The only loser in the whole deal is the climate and Canada's commitment to climate change action because it gets pushed down the road.”

“That's the danger,” he said.

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WTF! What is wrong with Justine Trudeau, did he get out on the wrong side of bed, go senile overnight or drink contaminated water while travelling??? This is just pure greenwashing and solves nothing. It is time for Trudeau to step aside and get a party leader that is serious about climate change. This has to be a slap in the face for Steven Guilbeault and undermines climate change mitigation.

If Trudeau doesn't step aside, this will only get Pierre Poilievre elected, who will take the country backwards 100 years. Maybe it is time to vote for the Green Party than Liberals this time around.

This is indeed a red line for the razor thin support Trudeau has in competitive ridings. This is an opportunity for the NDP to step up and work harder in those many ridings to ensure the progressive vote still keeps Poilievre in opposition.

Did you not read the part about this being political strategy on both sides?

The Green Party burned its chances in my riding two elections ago by running a fake candidate. This was also the time when childish infighting was turning off a lot of its potential voters. The NDP us the only party in this highly competitive ridings that has a chance to top the polls by a hair's breadth and win the seat against the Conservative or Liberal candidate.

They need to get to work right now.

What if LNG is additional to coal instead of replacing it? Does that add to Canada's total?
What if LNG displaces future builds of hydro, renewables, and nuclear? Does that add to Canada's total?
Suncor and U.S. refineries export petcoke from Alberta's oilsands to developing nations as a cheap, lethal substitute for coal. Does that add to Canada's total?

Excellent analysis here:
"Getting emissions credits for LNG exports a myth that refuses to die" (Edmonton Journal)

"China is unlikely to shut down coal plants that are already built and have operating life remaining. In light of this, LNG from B.C. is more likely to displace the low-emitting sources of energy — namely, solar and wind — now coming online in China, rather than the polluting legacy assets.
"Given recent energy developments in China, the claim that B.C. LNG will only displace coal is unfounded. Rather, the opposite scenario — that LNG from B.C. will displace low- and zero-emitting power sources — is more likely."
"Will B.C. LNG exports reduce global carbon pollution? The math simply doesn't add up" (Pembina Institute)
"There is no evidence that LNG [from Canada] will replace coal in Asia. … LNG will also likely displace nuclear power, renewables, and natural gas from other sources in many importing countries. There are many locations where LNG consumption would be additional to coal consumption, instead of replacing it. Importantly, greenhouse gas emissions from fracking, transport, liquefaction, and regasification significantly reduce LNG's greenhouse gas benefits over coal."
"Unjustified adverse greenhouse gas impacts of the Pacific Northwest LNG proposal" (2016)

There are too many "if's" for this dumb policy effort to work. The first one that comes to mind is the fact that, here in BC, fugitive emissions from fracking the hell out of the Montney and Horn River sedimentary basins for the LNG industry are counted in Canada. Scope 3 emissions don't add up as an equivalent.

The point that China could do the same and claim credit for lowering emissions in the countries it exports its solar panels to makes more sense. China makes very good panels and is ramping up mass production not just for export, but to deploy in massive quantities within its own domestic economy.

Coal already peaked there in 2021 and is entering a long period of decline. Canadian LNG had nothing to do with that. But it's telling that Roberts Bank s the only port on the continental West Coast that agreed to ship thermal coal to China. Ports Canada (the feds) has the power to terminate that contract but has chosen to be the odd man out instead.

Trudeau's two-faced hypocrisy has taken a very bad turn through these shallow efforts to game the Paris Agreement. What's next, one has to ask?

Trudeau is becoming Poilievre's best friend, politically speaking.

As the article points out, for Canada to reduce GHG on our ledger via international GHG-credits, Canada must convince some other nation to add an equal amount of GHGs onto their ledger. That's very unlikely. In fact, Canada has been trying to do this for years with the Western Climate Initiative (WCI) credits that Quebec buys from California. Canada even includes these credits in its official 2030 GHG projections to the UN. But, unsurprisingly, USA has never shown any interest in adding more GHGs onto its books just so Canada can report fewer. Despite zero uptake, here's what Canada wrote in their official 2022 8th NATIONAL COMMUNICATION AND 5th BIENNIAL REPORT to the UNFCCC: "Negotiations are still underway to ensure that international purchases of credits under the Western Climate Initiative (WCI) could be used towards Canada’s compliance with the Paris Agreement. According to WAM projections, there could be up to 4 Mt of credits purchased under the WCI by 2030." And they lower our GHG projections by that amount when showing how close we are to meeting our targets. More pencil pushing games while the climate unravels...

"Canada is exploring every avenue to reach its climate commitments, the spokesperson said."

Well, apparently every avenue except, you know, actually doing things that reduce emissions.

We need two border fees, one for imports and one for exports.

For imports we should impose an import fee equivalent to our carbon tax, unless the exporting country has an equivalent tax

For exports we should impose an export fee equivalent to our carbon tax unless the importing country has an equivalent tax.