CALGARY -- Canada, the world's fourth-largest oil producer, needs to give clear policy signals and leverage its abundant clean electricity resources to sharply cut carbon emissions, the International Energy Agency (IEA) said on Thursday in a review of the country's energy policies.

More than 80% of Canada's electricity supply comes from non-emitting sources, mainly thanks to its huge hydropower resources, but the country is the world's 10th largest carbon emitter. The majority of greenhouse gases come from the oil and gas sector.

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, and introduced policies, including a price on carbon, to help get there.

of Canada's policies, the first since 2015, noted the country's role as a major producer, consumer and exporter of energy presented "both challenges and opportunities" for reaching its targets. Energy makes up 10% of Canada's gross domestic product.

"Canada's efforts to reduce emissions – of both carbon dioxide and methane – from its oil and gas production can help ensure its continued place as a reliable supplier of energy to the world," IEA executive director Fatih Birol said in a news release.

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 pursuing innovation in fields including carbon capture, utilization and storage; clean hydrogen; and small-module nuclear reactors, and the IEA said further federal support for research and development would help speed up progress.

The country should increase power grid interconnections between provinces and territories to help balance decarbonization efforts across the country, the report added.

It also called for close coordination between federal, provincial and territorial governments in setting clear targets for energy efficiency in the buildings, transport and industry sectors.