Ottawa is expected to release details of a new investment tax credit to make carbon capture technology more economically attractive
Carbon capture’s role in reducing Canada’s environmental footprint will come into sharp focus in this week’s budget, with Ottawa expected to release details of a new investment tax credit to make the technology more economically attractive.
Alberta Energy Minister Sonya Savage told The Globe and Mail that Ottawa’s new tax credit will have to cover at least half of project construction costs for carbon-capture projects to be remotely feasible. That’s because CCUS is both expensive and lacks revenue streams outside of enhanced oil recovery .
“It’s their climate plan, it’s their targets, and there’s no way for them to reach it without CCUS,” Ms. Savage said. Once built, the hub will be among the largest integrated CCUS projects in the world, able to capture almost four million tonnes of carbon each year – about as much as all projects in Canada capture today.
But CCUS projects rely on investor certainty, says Jan Gorski, the director of oil and gas with the Pembina Institute, a think tank. Adam Chalkley is the director of low-carbon development at Enbridge. Speaking with The Globe about the new Wabamun hub proposal, he said “the majority – if not the vast majority – of all carbon-capture projects contemplated in Canada likely hinge on the investment tax credit.”
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