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CALGARY — Canada’s five largest oilsands companies pledged Thursday to cut roughly 97 per cent of their current total emissions with the goal of reaching a net-zero emissions target by 2050, with help from both the federal and provincial governments.

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A group called the Oil Sands Pathways — featuring Canadian Natural Resources Ltd., Suncor Energy Inc., Cenovus Energy Inc., Imperial Oil Ltd. and MEG Energy Corp. — laid out oilsands emissions reduction targets on Thursday, including a plan to cut 68 megatonnes of CO2 emissions by 2040, which would amount to 97 per cent of the sector’s total 70 MT of emissions in 2020.

“This is a different challenge,” said Al Reid, director of Oil Sands Pathways and executive vice-president of stakeholder engagement at Cenovus.

“We’ve all made emissions intensity reductions as we’ve had a carbon price in Alberta since 2007,” he said, but a commitment to absolute cuts in total emissions is a new goal for the industry.

The five companies also laid out interim targets that included 22 MT in cuts by 2030, an additional 25 MT by 2040 and 21 MT by 2050.

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The pledge drew praise from business leaders, saying it would put pressure on other international oil companies and resource producers to set similar targets.

It will put some pressure on the rest of the industry to follow their lead

Adam Legge

“I think it will put some pressure on the rest of the industry to follow their lead, which is positive for the sector, for the reputation of Canada and in the capital markets,” said Adam Legge, president and CEO of the Business Council of Alberta, noting that conventional oil producers, gas producers and international competitors could also undertake similar initiatives.

“I think there’s a huge potential risk in being a first mover but I think they’ve done it boldly, they’ve done it collaboratively and in a way that I think will yield some dividends for them,” Legge said.

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A handful of other companies have made individual commitments, including Calgary-based Whitecap Resources Inc. and Federated Co-operatives Ltd., which announced a partnership Thursday to capture carbon at Co-op’s Regina oil refinery. Globally, Royal Dutch Shell Plc, TotalEnergies SA and BP Plc. have all pledged to cut their emissions drastically, though they have been selling off their higher-emitting assets.

To reach the first milestone in the oilsands, the group of companies “will focus on building out a carbon capture network in the oilsands” that will include a carbon pipeline to gather sequestered CO2 from 20 oilsands facilities and ship that carbon to a storage facility in Cold Lake, Alta.

Reid called the carbon pipeline and storage facility “the fundamental or anchor project” that will enable oilsands producers to cut their emissions in the future.

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In a release, the Pathways group pointed to government funding initiatives in Norway and the Netherlands for CO2 capture infrastructure from oil and gas operations.

“When you have a really grand challenge, you have to have industry and government come to the table together and that’s how you solve those grand challenges,” Reid said, adding that Ottawa has provided a handful of incentives that will help oil producers meet some of their emissions reductions targets.

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Those include the Net Zero Accelerator Fund, income tax credits for carbon capture projects and research and development funding through Natural Resources Canada and, provincially, at Emissions Reduction Alberta.

Asked whether those supports would be enough, or if the companies are asking for more, to meet their emissions targets, Reid said talks with Ottawa and provincial governments are ongoing. “That’s a question we still have to answer,” he said.

Royal Bank of Canada, the country’s largest bank, released a report this week laying out pathways for the country to reach a net-zero emissions profile and estimates of the total cost of the energy transition, which the bank pegged at $2 trillion over the next 30 years.

Among those pathways, the bank identified cutting emissions in the oil and gas sector and in the oilsands specifically as one of the more challenging areas for Canada to meet its net-zero emissions aspirations by 2050.

In the oil and gas industry, the bank believes $13.4 billion in emissions-abatement spending is needed annually for the next 30 years to reach emissions reductions targets. The bank projects the cost of carbon reduction in the oilsands at $5.5 billion per year.

• Email: gmorgan@nationalpost.com | Twitter: geoffreymorgan