Canadian oil sands producers said on Wednesday they would form an alliance to achieve net-zero greenhouse gas emissions from their operations by 2050, as the cash-rich firms come under pressure to meet the country’s goal on energy transition.
Oil sands producers, which extract some of the world’s most carbon-intense crude, face investor pressure to reduce their environmental impact.
Prime Minister Justin Trudeau plans to raise Canada’s carbon price steeply over time to position the country for carbon-neutral status by 2050.
The alliance, which includes Canadian Natural Resources (CNQ.TO), Cenovus Energy (CVE.TO), Imperial Oil (IMO.TO), MEG Energy (MEG.TO) and Suncor Energy (SU.TO), will work with federal and Alberta governments to help Canada meet its climate goals, the companies said.
The country’s oil sands producers are generating billions more in free cash flow in a faster-than-expected pandemic rebound, but have taken a cautious approach to spending it that is disappointing environment-minded investors.
The companies said they would look to link oil sands facilities in the Fort McMurray and Cold Lake regions to a carbon sequestration hub, use carbon capture and storage technology, as well as clean hydrogen, fuel switching and other methods to reduce emissions.
The companies will also tap into emerging emissions-reducing technologies including direct air capture and small modular nuclear reactors, among others.