Oil and gas emissions flat in 2025 despite record output

Canada's greenhouse gas emissions rose about one per cent in 2025 to roughly 691 megatonnes, while emissions from the oil and gas sector held essentially flat despite record crude production, according to an early estimate released Thursday by the Canadian Climate Institute.

The Early Estimate of National Emissions, produced by the institute's 440 Megatonnes project, puts national emissions at 690,865 kilotonnes of carbon dioxide equivalent last year, up about six megatonnes from 2024. That leaves emissions 9.5 per cent below 2005 levels, the institute said in a news release. The federal target for 2030 is a cut of 40 to 45 per cent.

Oil and gas remained the country's largest-emitting sector at an estimated 207.1 megatonnes, down 0.2 per cent from 2024, the data shows. Oilsands emissions rose by about 844,000 tonnes, or 0.9 per cent, to 91.9 megatonnes. That was more than offset by a drop of about 988,000 tonnes from conventional oil production and about 493,000 tonnes from natural gas production and processing.

The flat result came in a year when Canada produced a record 310.9 million cubic metres of crude oil and equivalent products, up 4.0 per cent from 2024, according to Statistics Canada. Alberta oilsands output rose 3.9 per cent to 203.1 million cubic metres, the agency said.

The institute attributes most of last year's national increase to two sectors. Building emissions climbed about six per cent, mainly because of a colder winter, and electricity emissions rose about five per cent on greater use of natural-gas-fired generation, the institute's analysis said.

About 80 per cent of the country's electricity came from non-emitting sources in 2025, down from 84 per cent in 2020, the analysis said. Transport emissions were roughly unchanged, and heavy industry emissions fell slightly, which the authors said was due more to lower economic activity than to decarbonization.

Agricultural emissions dipped 0.2 per cent to 69.6 megatonnes, with on-farm fuel use up 10.3 per cent and crop production emissions down 4.9 per cent, according to the institute's sector table.

"Canada remains off track to meet its climate goals, but the solution is no mystery: clean electrification is the linchpin of climate progress," Ross Linden-Fraser, acting director of 440 Megatonnes, said in the release.

Institute president Rick Smith said the increase "is yet another signal that the country must accelerate action to meet the Carney government's own commitments."

The estimate is an independent calculation, not official government data. Figures for 2005 through 2023 come from Environment and Climate Change Canada's National Inventory Report, while the 2024 and 2025 numbers are the institute's own estimates, built with Stiebert Consulting from economic data and historical trends in energy efficiency, emission intensity and energy decarbonization. The institute says the federal inventory is published each spring and is about 16 months out of date when it appears.

Official 2025 figures will come in a future edition of Environment and Climate Change Canada's National Inventory Report, which the department publishes each spring.