In an attempt to compete globally in clean tech and reduce greenhouse gas emissions, Canada’s federal government will introduce investment tax credits for carbon capture, utilization, and storage (CCUS) and clean technology manufacturing.
“As an important pillar of Canada’s clean economy jobs plan, the government is focused on implementing, on a priority basis, the new clean economy investment tax credits for carbon capture, utilization, and storage; clean technology adoption; clean hydrogen; clean technology manufacturing; and clean electricity,” the federal government said in the Fall Economic Statement this week.
The government aims to introduce legislation on CCUS in Parliament this fall.
The 2023 Fall Economic Statement also announced that the Canada Growth Fund would be the principal federal entity issuing carbon contracts for difference. On a priority basis, the Canada Growth Fund will allocate up to US$5.1 billion (C$7 billion) of its current US$11 billion (C$15 billion) in capital to issue all forms of contracts for difference and offtake agreements.
The investment in tax credits for CCUS is welcome news for Canadian energy companies, which have been waiting for months for details about the promised incentives for clean energy technologies. Earlier this year, a large CCS project in Canada’s oil sands was said to be struggling to obtain a contract for difference that would guarantee its developers a minimum carbon price.
More Pathways Alliance, which includes six of the largest oil and gas companies in Canada – Canadian Natural, Cenovus Energy, ConocoPhillips Canada, Imperial, MEG Energy, and Suncor – has proposed a network that would transport and store captured CO2 from oil sands facilities and could expand to serve facilities from other industries in the region.
The president and CEO of the Canadian Association of Petroleum Producers (CAPP) Lisa Baiton Commented on the upcoming legislation on the Carbon Capture Utilization and Storage Investment Tax Credit, the president, said in a statement,
“The CCUS ITC as well as additional resources for carbon contracts for differences are critical pieces needed for carbon capture projects to proceed and if it is competitive with other jurisdictions, it has the potential to unlock significant private sector investment.”
