On July 5, 2025, the Government of Canada released a draft order declaring that the federal Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) will not apply in Alberta, subject to a 60-day consultation period ending September 3, 2025.

Under section 10 of the Canadian Environmental Protection Act, 1999 (CEPA), such an agreement allows federal regulations not to apply in a province if equivalent provincial measures are in place, thus avoiding duplication. Alberta’s methane reduction framework, including the Alberta Energy Regulator’s Directive 060 and Directive 017, supported by the Methane Emission Reductions Regulation, came into force on January 1, 2020, alongside the federal rules. In 2020, a five-year equivalency agreement was signed, recognizing Alberta’s regulatory measures as equivalent to federal standards in terms of reducing methane emissions, thereby avoiding overlapping requirements for industry. With the existing agreement expiring in October 2025, a new agreement covering the period from 2025 to 2030 is proposed.

The draft agreement continues to rely on Alberta’s regulations to meet or exceed federal expectations for methane emission reductions, measured in carbon dioxide equivalent (CO2e). Alberta’s laws also have provisions equivalent to sections 17 to 20 of CEPA, covering the right to investigate alleged environmental offences. The updated agreement would similarly exempt Alberta from the federal methane rules while maintaining federal oversight through reporting and annual reviews. Additionally, it expands information-sharing requirements to include facility-level data, verification activities, enforcement measures, and provides for annual meetings between Alberta and federal authorities to review progress.

Environment and Climate Change Canada has justified the continuation of equivalency based on updated technical analyses. The Department compared methane reductions under Alberta’s regulations and the federal regulations using detailed engineering-based estimates and Canada’s Greenhouse Gas and Air Pollutant Emissions Projections: 2018 reference case. Results show Alberta’s cumulative methane emission reductions between 2025 and 2029 are expected to reach 38.68 megatonnes (Mt) CO2e, compared to 37.77 Mt CO2e under the federal rules. While there are differences in the reductions for specific equipment types—such as higher reductions for pneumatic controllers under Alberta’s rules, and higher reductions for routine venting under the federal rules—overall the outcomes are considered equivalent given the modest difference of 2.4% and the uncertainty inherent in modelling. Yearly emission reductions are forecast to be roughly similar between both regimes, with Alberta’s cumulative reduction slightly higher by 0.91 Mt over five years.

In effect, the proposed order and draft equivalency agreement seek to continue an approach that has been in place since 2020, recognizing Alberta’s capacity to regulate methane emissions effectively while improving oversight and reporting obligations.

Canada (Proposed) July 2, 2025
Disclaimer: Insights are for informational purposes only and do not reflect RRI’s official position or constitute legal opinion.