Oil and gas emissions dropped in 2025 despite increased production: report
Top line
Despite a slight drop in oil and gas sector emissions, Canada's overall greenhouse gas emissions rose in 2025, widening the gap to its 2030 climate targets due to increased building heating and natural gas use.
Summary
According to the Canadian Climate Institute's annual report, Canada's total greenhouse gas emissions rose by one per cent in 2025 to 691 million tonnes, widening the gap to its 2030 climate targets. Interestingly, emissions from the oil and gas sector slightly decreased despite record production, driven by efficiency gains and fugitive methane reductions. Conversely, increased emissions were primarily fueled by colder winter weather driving up building heating needs and a higher reliance on natural gas for electricity generation, while potential policy rollbacks threaten to further stall decarbonisation efforts.
Highlights
- Canada's total greenhouse gas emissions rose by about one per cent in 2025 to 691 million tonnes of carbon dioxide, according to the Canadian Climate Institute.
- Canada is significantly lagging behind its Paris climate accord target of cutting emissions by 40 to 45 per cent below 2005 levels by 2030, potentially running 20 years behind schedule.
- Emissions from Canada's oil and gas sector decreased by 0.2 per cent in 2025, even though crude oil production increased by roughly four per cent compared to 2024.
- While oilsands emissions grew by 844,000 tonnes, reductions in conventional oil and gas extraction and downstream activities—driven by fugitive methane cuts and higher operational efficiency—offset the rise.
- Buildings and commercial structures were the main drivers of the overall national emissions increase, exacerbated by a colder winter and continued heavy reliance on fossil fuels for heating.
- Electricity generation also contributed to increased emissions due to a higher reliance on natural gas.
- The report warns that policy shifts under Prime Minister Mark Carney's government, such as weakened industrial carbon pricing and delayed methane regulations, risk driving emissions higher.
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