(TheNewswire)
Oct 14, 2025 – TheNewswire
Fall alwaysfeels more like the start of a new year to me – summer vacations areover, kids are back to school, and a wave of climate events kick off,from Canada’s National CCUS Convention to the UK’s CarbonCapture and Storage Association’s conference, and the United NationsClimate Change Conference of the Parties. This season sets the stagefor gathering lessons from abroad and speculating what they could meanfor projects here at home.
With a newfederal government, the launch of a major projects office, severalprovinces advancing their carbon storage legislation, and othersnavigating changes to their industrial emission pricing systems… itfeels like the end of 2025 is also the start of a new defining yearfor Canada’s carbon management landscape.
Canada’s projects have influenced carbon capture, utilization andstorage (CCUS) development worldwide, with key lessons informingpolicy and deployment strategies across Europe, the U.S., andAsia. TheWeyburn-Midale Enhanced Oil Recovery (EOR) project has providedextensive evidence supporting the long-term safety and security ofstorage in the Western Canadian Sedimentary Basin. Boundary Dam,Quest, and the Alberta Carbon Trunkline have proven that industrialemissions can be captured and stored at meaningful commercial scales.Recently, ambitious projects by Canadian companies like Entropy,Svante, and Deep Sky demonstrate we can build, scale, innovate andimplement carbon capture technologies right here at home. Mostimportantly, the lessons learned from all these projects continue toshape the development of carbon management technologies globally,successfully positioning Canada at the forefrontof global climate solutions.
Over the past 25years, Canada has captured nearly 22 million tonnes of CO2 and safely stored over 62 million tonnesunderground. (Fun fact: Canada stores more than is captured, asCO2 captured at the GreatPlains Synfuels Plant in North Dakota is transported to Saskatchewan tobe injected for EOR on Canadian soil). Canadahas demonstrated real leadership; the carbon management projects herehave helped shape the development of CCUS globally. And this matters. International bodies such as the IEAand IPCC identify CCUS as one of the few emission reductiontechnologies ready for large-scale deployment today.This assurance offers a critical bridge, enabling emissions reductionin hard-to-abate sectors immediately, while other decarbonizationsolutions are still developing.
The economics ofadding capture to any industrial process is challenging. In additionto the upfront capital of the equipment, the ongoing operational costscan be substantial – and the capture plant may impact the facility’score operations. Unless there is demand for a decarbonized product -and a market willing to pay a higher price for that product -companies will have a hard time making capture investable, withoutgovernment intervention.
And I haven’teven mentioned the costs of transportation and storage, which candramatically fluctuate depending on operational locations andproximity to storage basins.
Canada can learnfrom other jurisdictions where CCUS projects are advancing. Norway hasa long-standing carbon tax which is set to increase to USD$220/tonneby 2030, making the cost of emitting without solutions challenging formost industries. The Norwegian government has also committed bothcapital and operational funding for the Longship project, supportingtwo capture facilities and an offshore transportation and storagesystem. The United Kingdom is also creating a major push for CCUSinvestments, committing over CAD$40 billion in multi-structuredinvestments covering all parts of the CCUS value chain. The UnitedStates offers the 45Q tax credit, which allows companies to claim upto CAD$118/tonne for every tonne stored and up to CAD$249/tonne fordirect air capture, both of which will increase with inflation. The45Q approach is also layered on top of billions invested directly inspecific projects across the country.
Here in Canada,industrial carbon pricing is set to rise annually, reaching $170/tonneby 2030. However, in many provinces, the market value of creditscurrently lags behind the headline price, creating uncertainty forproject developers. Currently, the largest incentive for Canadianprojects is the CCUS investment tax credit (CCUS-ITC), providingcapital expense support where captured CO2 is injected for permanent storage or used inconcrete. The Canada Growth Fund also invests in projects throughofftake agreements or tailored investment support. Each province hasdifferent incentives, such as Alberta’s Carbon Capture IncentiveProgram, and there are several government departments continuing toinvest in research, development and pilots.
Even with all ofthis in place, we’re not seeing many projects reach a positivefinancial investment decision.
We know Canadadoesn’t currently have the same spending appetite or capacity assome other countries… nor do we have the desire to increasepenalties for emitting industries as it puts our economic developmentat risk amidst the worlds geo-political uncertainty. However, thereare four things I think could greatly improve our continued ability tolead CCUS efforts for decades to come.
First, greaterpolicy certainty is necessary. Industries and investors need to beconfident that things aren’t going to change dramatically withelections, and that their product holds long term value for theCanadian economy. Investors will seek assurance that billion-dollarprojects are designed for long-term durability andsustainability. There needs tobe unified, consensus between government levels across party lines onour major climate approaches to create stability.
Second, we needto incentivize industrial projects where CO2 is produced as a by-product of processes suchas ethanol, ammonia and urea plants. These industries have very narrowmargins, so while capturing the CO2 may not be as capital intensive as otherindustries, the cost of transporting and storing the CO2 can still be significant. If projects aren’tnear existing infrastructure and storage sites, changes will berequired for us to see new projects in those areas.
Third,broadening CO2 utilization couldimprove project economics. EOR is one example of use whereCO₂ is stored, monitored and verified, ensuring it remains securelycontained underground. In turn, EOR is a carbon credit pathway forprovincial emission pricing systems and the federal Clean FuelRegulation and Clean Electricity Regulation. However, it’s not aneligible use under the CCUS-ITC. Uses that can verify permanentremoval should be eligible for all incentives available, and I’dargue uses that offset future petroleum needs should also have apathway to eligibility.
Fourth, we needstronger and more effective carbon markets. Today, most provincialmarkets are oversupplied with credits, and lack differentiationbetween fundamentally different activities. For example, the treatmentfor a credit that is generated by adding a capture facility vsrepairing a methane leak. Both actions cut emissions and create costsfor a company, but fixing a methane leak creates a product that can besold, while capturing CO2 doesn’t generaterevenue and is treated as a waste stream. Also, credit markets arecurrently provincial, which creates challenges as companies operateinterprovincially, and storage capacity and regulations are notequivalent across the country. At a minimum, increasing pricing transparency and makinggenuine efforts to expand carbon markets regionally or nationally areessential short-term steps toward unlocking the markets fullpotential.
These aren’tsmall challenges to tackle – but as I speculate about the year ahead,they’re challenges I hope we can address. Our continued leadershipdepends on it.
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