Canada's carbon price to rise to $170/tonne: implications for upstream Report

Insight 17 December 2020

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Report summary

Canada is one of few major oil and gas producing countries to enact robust carbon price policies. The Federal Government announced plans to increase the fuel levy from Cdn$50/tonne in 2020 to Cdn$170/tonne in 2030. This is on par with even the most progressive European countries. Output-based pricing systems that are already in-place for large industrial emitters, like Alberta's oil sands, will be somewhat shielded from the full $170/tonne carbon price. We detail which projects are expected to face carbon liabilities and the impacts of an increasing price.

Executive summary
- Canada's emissions in context
- Ensuring pollution is not free
- Assessing the cost impact on oil sands projects
- Alberta TIER regulations
- Projects exposed to carbon liabilities under TIER now see a higher impact under a C$170/tonne price
- Quantifying potential carbon costs across different scenarios
- Clean Fuel Standards
- Comparison to other regimes

Tables and charts

This report includes the following images and tables:

Canada's emissions in context
Federal Government's proposed carbon price
Carbon costs under TIER using $50 versus $170/tonne price

Primrose / Wolf Lake valuations under different carbon pricing scenarios
Primrose / Wolf Lake 2021 netback waterfall
Primrose / Wolf Lake 2030 netback waterfall
Status of carbon price or emissions trading system (ETS) of major hydrocarbon producing countries