How Oil and Gas Producers Can Best Leverage Alberta’s Methane Reduction Deployment Program Amid Evolving Regulatory Requirements.

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On November 12, 2025, Emissions Reduction Alberta (ERA) announced $22.4M in funding towards methane reduction from oil and gas operations through the “Methane Reduction Deployment Program” (MRDP). The intent of the program is to accelerate the deployment of commercially available methane mitigation technologies by offering ERA funding to early adopters¹.

On June 10, 2026, Minister of Environment and Protected Areas, Grant Hunter, announced an additional $19.4M of funding.

This grant was released in anticipation of enhanced methane regulations being finalized by the federal government, which were published on December 31, 2025, and requires near elimination of methane venting from a variety of upstream and midstream sources by 2030²³. Alberta and Canada have since committed to finalizing an equivalency agreement to reduce methane emissions 75% by 2035 in Alberta. Completing a methane equivalency agreement by January 1, 2027, is one of the terms of the Alberta-Canada MOU for a west-coast pipeline. Updated Alberta regulations are thus expected by the end of 2026.

Alberta oil and gas producers can leverage the available ERA funding to secure supply at a discount and be well positioned to meet future regulatory requirements.

Basic Information

The program provides up to $2M per company to reduce emissions through the deployment of ERA-approved technologies, such as pneumatic conversions with nitrogen. Details include:

Applicants must be upstream or midstream oil and gas companies (not technology providers)
Only facilities located in Alberta are eligible for funding
Funding for 50% of eligible project costs, paid in two installments
Participants may stack MRDP funding subsidies with environmental attributes (offsets)
Projects to take max. 2 years to complete, must finish by March 31, 2029
Project participants must choose from a variety of approved eligible technologies (see list here)
There is a $1 million cap per technology category, meaning if a company wants to pursue the full $2 million in funding, it will need to be divided between different technology umbrellas (ex. pneumatics, methane slip, routine venting, etc.)
Both capital and operating expenses are eligible project costs; costs must be incurred over the project duration
Emissions reductions must continue for at least 5 years from project start; ERA reserves right to audit
Funding is first-come-first serve!

Maximizing value: Designing a high-impact project

The ERA allows for aggregate projects where multiple sites can be retrofitted at a given time. Each site must be retrofitted with the same technology type, and aggregate projects must be contained within a single region. (Companies can submit multiple projects, each with a different technology and/or regional application, up to the $1M cap).

Converting natural gas driven pneumatics to nitrogen is one of the cheapest ways to reduce the most emissions across the greatest number of sites. The ERA funding gives producers the opportunity to convert multiple sites to nitrogen in one easy-to-manage project. Kathairos has successfully completed large campaigns installing 300+ tanks within 3 months for large U.S. producers. For companies that have hundreds of sites that will need to be addressed by 2030, the MRDP is an opportunity to start thinking at scale and make early headway.

A project that involves mass nitrogen-unit deployments can be done easily and quickly, allowing for quick progress on pneumatic retrofits with minimal labour and overhead costs. Because nitrogen eliminates 100% of on-site pneumatic methane venting, producers know they’re maximizing funds available for methane reduction.

Kathairos offers 2- and 5-year capital leases and can arrange tie-in services in compliance with ERA requirements. With a 20-year warranty, no moving parts and all maintenance included, producers can be confident that the nitrogen systems will still be going strong, long after the ERA’s 5-year project requirement.

UPDATED: Stacking MRDP funding with emission offsets

When the MRDP was first launched, in November 2025, it was not permitted to generate offsets on MRDP-funded projects.

However, on August 13, 2026, Emissions Reduction Alberta reversed this decision. It is now possible to generate offsets from MRDP-funded projects.

This creates significant opportunity for Alberta oil and gas producers. Offsets can be generated for up to 10 years, unless regulatory compliance is required beforehand (ex. if venting is prohibited come 2035, operators that start vent reduction projects in 2026 can generate offsets for 9 years). Currently, the market price for TIER offsets is relatively low, at $30/tCO2e. However, come 2030, there will be a $60/tCO2e carbon price floor in place, with prices escalating through to 2035.

Under the original MRDP project requirements, operators had to choose between receiving the 50% subsidy or generating offsets, which, over the long term, are likely to be more valuable than the ERA funding.

Amidst current low TIER prices and uncertainty regarding future regulatory obligations, producers may have legitimately been wary of either option. However, with the recent eligibility changes allowing for stacking, the decision is straightforward: take both.

The ERA funds are available until they run out (“first come, first serve”). For Alberta producers, the “stacking” of offsets with ERA funding creates a big incentive for acting early, before all funds are claimed.

Kathairos can support with both the MRDP application and offsets. The company provides a full-service, in-house offset management program that makes offset generation seamless for all customers.

Next Steps

Additional information on the Methane Reduction Deployment Program can be found on the ERA website.

The Program will remain open until funds are exhausted. Companies can register through the ERA portal, submit a pre-application, and then get access to the full application with costs and GHG workbooks.

Interested in what a MRDP-funded project and associated offset returns might look like at your facilities? We provide complimentary quotes and modelling to identify the best sites for maximum return.

Kathairos can support with all needed application documentation. Let us show you how easy eliminating pneumatic venting can be, no matter how many sites there may be. Reach out to [email protected].