While the IEA lauded Canada’s leadership in policies to cut emissions, it added the country “should pay close attention to shifting demand for oil and gas globally.”
The world-wide fight against climate change is prompting a push by many countries to significantly curtail the use of fossil fuels in the coming decades, potentially slashing demand for oil and gas.
“Canada must focus on significantly carbonizing its oil and gas sectors while at the same time ensuring competitiveness in increasingly well-supplied world markets,” the agency said.
The country’s own oil sands will pose a further challenge even as “Canada scores well on overall ESG indicators relative to many other oil and gas producers,” the IEA said. In recent years, many funds and banks have pulled funding from the Canadian oil sands sector, where some of the most carbon intensive oil in the world is extracted.
“The environmental profile of oil sands production, in particular, will become a greater focus for importing countries and warrants action,” the IEA said.