By Nia Williams
CALGARY, Alberta (Reuters) -Canada, the world's fourth-largest oil producer, can be a key global supplier for years to come providing it sticks to promises to sharply cut emissions, the International Energy Agency (IEA) said on Thursday.
In its first review of Canada's energy policies since 2015, the IEA said the country's role as a major producer, consumer and exporter of energy presented "both challenges and opportunities" for reaching its decarbonization targets.
Prime Minister Justin Trudeau's Liberal government has pledged to cut carbon output 40% to 45% below 2005 levels by 2030 and reach net-zero emissions by 2050. Energy makes up 10% of Canada's gross domestic product, and oil and gas is responsible for 26% of the country's greenhouse gas emissions, making it the highest-emitting sector of the economy.
IEA Director Fatih Birol praised Canada's efforts so far to cut carbon emissions but said further work was needed.
"Canada is definitely in the top league of all those oil-producing countries when it comes to addressing our climate challenge," Birol told a news conference. "We want to see those strategies being implemented."
Birol said the world will need oil and gas even while aiming for net-zero emissions by 2050, and he would like that production to come from reliable countries with plans to produce it as cleanly as possible, highlighting Canada.
But environmental campaigners Équiterre criticized the IEA as being inconsistent for laying out how Canada can reduce emissions from oil and gas production in order to continue exporting after 2050.
"The myth of green fossil fuels is persistent," said climate policy analyst Émile Boisseau-Bouvier.
Natural Resources Minister Jonathan Wilkinson said Canada needed to reduce both emissions intensity of its oil and gas and consumption of fossil fuels.
To speed up decarbonization of the oil and gas sector, the IEA called for strong action to curb methane emissions and accelerate the rate of innovation in energy technology.
Canada is already developing technologies, including carbon capture, utilization and storage (CCUS), clean hydrogen and small-module nuclear reactors, and the IEA said further federal funding for research and development would help speed up progress.
Birol ranked CCUS as one of the top three most critical decarbonization technologies in the world, out of around 800 looked at by the IEA.
Sonya Savage, energy minister for Canada's main oil-producing province Alberta, told Reuters she was pleased the IEA acknowledged that oil and gas consumption will continue, and its importance to the Canadian economy.
(Reporting by Nia Williams; editing by Jonathan Oatis, Aurora Ellis and Richard Pullin)