Alberta, Canada’s main oil-producing province, announced that it would provide grants to cover 12% of eligible capital costs for building new carbon capture utilization and storage (CCUS) projects, as reported […]

Alberta, Canada’s main oil-producing province, announced that it would provide grants to cover 12% of eligible capital costs for building new carbon capture utilization and storage (CCUS) projects, as reported by Reuters on November 28. Alberta Energy Minister Brian Jean said CCUS is the “only viable option” for cutting emissions in hard-to-abate industries like oil and gas, cement, and petrochemicals. In addition, Alberta Premier Danielle Smith said the incentive program would cost the province between CAD3.5bn and CAD5.3bn, with an expectation to attract CAD35bn in capital investments over the next decade. Notably, this incentive from Alberta will supplement a federal government CCUS tax credit introduced last year.

The incentive program responded to calls from major Canadian oil producers for increased government support for CCUS technologies. In March 2023, Geneva-based oil producer International Petroleum Corp [IPCO:CN] committed to incorporating carbon capture and storage (CCS) procedures into its northern Alberta oil sands project, if the government offers more financial incentives. As Canada’s oil and gas hub and the highest-polluting province, Alberta is decisive in achieving the country’s climate objective of cutting carbon emissions by 40% to 45% by 2030 on 2005 levels. Energy Minister Brian Jean emphasized that CCUS technology would not only allow the province to maintain its position as a major bitumen producer but also contribute to large volumes of emission reductions. Despite these assertions, environmental campaigners argue that CCUS is an expensive and inefficient way to reduce emissions, cautioning against the risks of extending the lifespan of fossil fuel projects and diverting investments from renewable energy.

Sources:

https://www.reuters.com/markets/carbon/alberta-government-announces-carbon-capture-storage-incentive-program-2023-11-28/

https://www.canada.ca/en/department-finance/news/2022/08/additional-design-features-of-the-investment-tax-credit-for-carbon-capture-utilization-and-storage-recovery-mechanism-climate-risk-disclosure-and-k.html

https://www.reuters.com/business/sustainable-business/ipc-ceo-urges-canada-offer-more-funding-build-carbon-capture-2023-03-19/