DuPont Canada, Dow join call for absolute cap on emissions

21 October 2009 15:37  [Source: ICIS news]

TORONTO (ICIS news)--DuPont Canada and Dow Chemical Canada, two of the country’s largest chemicals producers, are urging the nation to adopt a national cap-and-trade system with an absolute cap on greenhouse gas emissions, they said on Wednesday.

The call for an absolute cap contrasts with arguments from Canada’s growing oil sands and bitumen industry, urging an “intensity-based” system for their sector.

In a joint statement, DuPont and Dow, along with environmental groups, two major banks and energy and resources firms, said that “having sectors with different cap types - that is, absolute and intensity - could create equity issues as well as fungibility issues that may impair trading efficiency” of a cap-and-trade system.

“The cap-and-trade system should place an absolute, national cap on covered emissions,” they said.

Also, Canada’s system should cover as much of the country's emissions as possible from the outset of the programme, they said.

Intensity-based targets, which would be set relative to some output or input measure - for example emissions per barrel of oil produced - would make it less expensive for the oil sands industry in Alberta to comply with emissions rules.

However, other industries, as well as non-oil producing provinces such as Quebec, fear that with such targets for the oil sands, they would then face a relatively higher burden to ensure that Canada still meets its overall emissions targets under international agreements.

The call for an absolute cap comes as Canada is closely watching the debate over cap-and-trade debate legislation in the US.

Any Canadian regulation will likely have to be closely in line with legislation in the US, Canada’s largest export market by far.

Canada has often been criticised for not having taken enough action to curb emissions, despite having signed on to the Kyoto protocol.

Critics have in particular focussed on rising emissions from Alberta's oils sands, and even US President Barack Obama has highlighted that industry as a concern.

Still, Canada’s federal and the Alberta provincial government have in recent weeks agreed to contribute major funding to two large carbon capture-and-storage projects, even though that technology is expensive and not yet commercially proven.

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By: Stefan Baumgarten
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