Keith Brooks, Programs Director, Environmental Defence Canada
Toronto | Treaty Lands and Territory of the Mississaugas of the Credit First Nation, and the traditional territory of the Anishinaabeg, the Haudenosaunee, and the Wendat – Today’s update from Business Future Pathways has shown that they’ve listened to the input of experts and taken a step in the right direction, by not including a fossil fuel ‘abatement’ category in Canada’s sustainable finance taxonomy. This report should be the end of the abatement conversation – public consultation has already established that including a category focused on the oil and gas sector in the taxonomy is unnecessary, unworkable, and not Paris-aligned.
Climate experts, financial institutions and many other stakeholders stressed that the inclusion of an abatement category would undermine the taxonomy’s credibility, entrench carbon lock-in, and delay the energy transition. With the federal government intending to use the taxonomy as a foundation for future green and transition bond issuances, it must chart the most efficient path to decarbonization — not direct capital towards an oil and gas sector that is misaligned with the Paris Agreement and has consistently resisted climate policy.
In order to be credible and usable, Canada’s sustainable finance taxonomy must be fossil-fuel-free.
Background:
- Business Future Pathways has published their Final Methodology Report sharing that it will move forward without the fossil fuel abatement category in Canada’s sustainable finance taxonomy, for now. It noted that the inclusion of the abatement category may be subject to further research on its feasibility.
- In July 2026, the Draft Methodology Report was released for public consultation. In the report, the fossil fuel abatement category was proposed by Business Future Pathways. It would aim to reduce emissions from the upstream oil and gas industry by “enabling select, tightly ring-fenced emissions-reduction investments,” even though the vast majority of oil and gas emissions actually come from combustion at its end use. None of the 40+ other taxonomies that exist in other jurisdictions around the world include such a category.
- Two-thirds of public respondents opposed the abatement category. Opposition came from a wide range of stakeholders, including NGOs, consultants, research institutes, international organizations, financial institutions, and individuals.
- See credibletaxonomy.ca for core principles to guide the taxonomy, and for video testimonies of experts presenting their concerns with the abatement category.
ABOUT ENVIRONMENTAL DEFENCE (environmentaldefence.ca): Environmental Defence is a leading Canadian environmental advocacy organization that works with government, industry and individuals to defend clean water, a safe climate and healthy communities.
For more information or to request an interview, please contact:
Alex Ross, Environmental Defence, media@environmentaldefence.ca
