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Kathairos has emerged as the leading North American solution for methane elimination from pneumatics, with more than 2,400 systems in operation across North America and over 70 major oil and gas producer partners.
In this post
On December 16, 2025, the Government of Canada announced the finalization of the new (“enhanced”) methane regulations (“Regulations Amending the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Compounds (Upstream Oil and Gas Sector)”). These regulations are available in their unofficial form prior to being formally published in the Canada Gazette, Part II on December 31, 2025
The release of the final regulations follows several years of engagement, regulatory development, and international commitments on methane. In 2021, Canada signed the Global Methane Pledge, committing to reduce methane emissions 30% by 2030, which was followed in late 2023, with the publication of the first draft of the enhanced methane regulations. More recently, the Carney government and Budget 2025 have highlighted more robust methane regulations as part of the Climate Competitiveness Strategy.
The enhanced methane regulations, which involve significant reductions in vented and fugitive methane emissions from upstream and midstream oil and gas operations by 2030, have been expected for the past several years. However, their contents were recently thrown into question on November 27, 2025, when a Canada-Alberta MOU referenced a later compliance date of 2035.
The final regulations, released December 2025, contain a slightly less ambitious methane reduction target than originally planned; instead of 75% reductions by 2030, the new regulations are projected to reduce methane emissions 72% by 2030. This provides Alberta and other provinces a longer runway to achieve the full 75% reductions, while still ensuring significant reductions by 2030.
New methane rules to take effect
The final methane regulations are similar in many ways to the draft regulations published in December 2023. As expected, the regulations require the near-elimination of methane venting by 2030. They also introduce new monitoring and reporting requirements designed to minimize leaks.
The amended regulations provide two separate “compliance pathways” for regulated facilities.
Part 1 – Prescriptive Compliance Pathway
- Upstream oil and gas producers are not permitted to vent methane as of January 1, 2030.
- Facilities with new operations after Jan 1, 2028 may not vent methane as of the day on which it begins operations.
- Limited exceptions apply, such as for planned maintenance, emergencies, and health and safety.
- Operators must conduct defined inspections (e.g., comprehensive, annual, screening) using approved methods and repair detected leaks within fixed timelines tied to emission rates.
Part 2 – Alternative (Performance-Based) Compliance Pathway
- Operators must meet performance-based limits on how much methane can be emitted, with specific intensity thresholds set for different facility types (e.g., 0.20% of hydrocarbon gas produced for a production facility or 0.11% for a transmission facility).
- Facilities must deploy robust monitoring and control strategies (e.g., continuous emission monitoring systems) that achieve methane reduction outcomes equivalent to or better than those required under Part 1.
- Enhanced methane monitoring must be backed up with credible data showing emissions performance relative to their chosen targets.
What about the Ottawa-Alberta MOU?
In November, the federal government and the Alberta government signed a Memorandum of Understanding (MOU) that provided the terms and conditions for the construction of new energy infrastructure to the west coast. The agreement includes a commitment from both parties to “Enter into a methane equivalency agreement on or before April 1, 2026, with a 2035 target date and a 75% reduction target relative to 2014 emissions levels.” This announcement, at the time, seemed discordant with the 2023 draft regulations’ intent to reduce emissions 75% by 2030. The MOU was interpreted by many as a signal that the final federal methane regulations would involve pushing back methane requirements five years.
The final federal regulations indicate a commitment to ensure early action on methane, with significant reductions (72%) required by 2030, while allowing provinces flexibility to achieve the full 75% reductions by 2035.
Equivalency agreements allow provinces to publish, implement and enforce their own regulations, provided they are “equivalent” to those made by the federal government. As a result, we may see differences between provinces in terms of the timelines and mechanisms associated with particular source requirements, or the approach used, but the provincial regulations will ultimately still need to be “equivalent to” the reductions and objectives set out in the final federal regulations.
Next steps
Equivalency agreements
There will need to be a short turn-around for the Alberta regulations and associated equivalency agreement, given the April 1, 2026 requirement in the MOU.
B.C. and Saskatchewan, who recently renewed their equivalency agreements on methane with the federal government, will have more time. Both B.C. and Saskatchewan’s updated regulations include some provisions from the draft (2023) federal regulations but will likely require additional updates to fully comply with the final federal regulations.
Funding opportunities
In the meantime, there are funding opportunities available to producers looking to get a head start and trial different solutions as they assess their preferred implementation (retrofit) strategy.
Emissions Reduction Alberta (ERA) recently unrolled the Methane Reduction Deployment Program, which covers 50% of methane reduction costs (up to $1 million per company). You can read our analysis of that program here.
With offset prices on the rise, now is also a good time for producers to start methane reduction projects that qualify for offset generation. Pneumatics or vent gas reduction projects will only be able to generate offsets until compliance deadlines take effect. As a result, early movers will not only be able to secure supply chains early, but will also be able to generate offsets from their methane reduction projects longer than those that wait. (Sounds complicated? We can handle the full offset process for you.)
