Canada and Alberta reach agreement to reduce methane emissions, PM's office says

TORONTO, March 25 (Reuters) - Canada's federal government and the government of Alberta have reached an agreement-in-principle aimed at reducing methane emissions in the province's oil and gas sector, Canadian Prime Minister Mark Carney's office said in a statement on Wednesday.

The agreement includes a target of reducing Alberta's methane emissions by 75% below 2014 levels by 2035.

It builds on a previous deal announced in November 2025 between Carney and Alberta Premier Danielle Smith to roll back certain climate rules to spur investment in energy production, while encouraging construction of a new oil pipeline to Canada's west coast.

Here are the key points of Wednesday's agreement:

• Canada and Alberta are negotiating an "equivalency agreement" under the Canadian Environmental Protection Act that would allow federal methane rules to be suspended in Alberta if the province delivers equivalent emissions cuts under its own system.

• Alberta’s proposed system would use a performance-based approach, blending regulations, offset credits and targeted investments to achieve reductions in emissions of the greenhouse gas.

• The governments committed to using an independent, jointly selected third party to model methane emissions and verify reductions.

• They also agreed to increase transparency, including by publishing data on emission sources and Alberta’s methane-reduction methods.

• Both agreed to take corrective measures if the province’s emissions cuts fall short.

• Once a draft equivalency agreement is finalized, it will undergo a 60-day public consultation, with the aim of completing the deal by the end of the year.

• The equivalency agreement would take effect no later than January 1, 2027, for a 10-year term, pending legislative amendments.

• "This agreement will provide regulatory certainty while supporting innovation and emissions reductions across the sector," Carney's office said.