Harnessing potential of biological CO2 capture for Circular Economy
Canada
Current Government Approach to CCUS
- Contribute to “net-zero by 2050” goals. Canada’s most recent-submission to the UNFCCC, projects opportunities for CCUS to reduce 2030 emissions by 16.3 Mt of CO2 per year; 3.8Mt of this is projected to result from CCUS-enabled hydrogen production.
- Build on Canada’s CCUS advantages, incl. domestic projects that have already captured & stored millions of tonnes.
Federal Policies / Funding
- CCUS Investment Tax Credit (ITC) for projects which permanently store CO2 in dedicated geological storage or in concrete. Available for expenses starting in 2022, valued at CAD $7.6B to 2030. To be released for consultation in the coming months.
- 2022-2030 rates: 60% for DAC; 50% for capture equipment in all other projects; 37.5% for transportation, storage, and utilization.
- Runs to 2041, rates to be reduced by 50% in 2031 (to incentivize projects this decade).
- Initially expected to include dedicated geological projects in the British Columbia, Alberta, and Saskatchewan.
- CCUS-related credit creation under the Clean Fuel Regulations: CCS and CO2-EOR projects that reduce the lifecycle carbon intensity of liquid fossil fuels, DAC-to-fuels, and clean H2 that displaces traditional liquid or gaseous fuels.
- Carbon Pricing (federal/provincial equivalents): 2023 price is $65/t, rising to $170/t in 2030 as per Strengthened Climate Plan.
- $15B Canada Growth Fund (CGF) The Fall Economic Statement 2022 identified low-carbon hydrogen and CCUS as key technologies for
accelerated deployment; Also identified Carbon Contracts for Difference (CCfDs) as one of the CGF’s investment tools. - Strategic Innovation Fund – Net Zero Accelerator received an additional $500M over ten years (increasing the total fund from $8B to $8.5B) to support the development of clean technologies (including CCUS). The Strategic Innovation Fund will also direct up to $1.5B of its existing resources towards projects in sectors including clean technologies and industrial transformation.
- Budget 2022 expanded the role of the Canada Infrastructure Bank (CIB) to invest in private-led CCUS infrastructure projects.
Future Priorities
- A Carbon Management (CM) Strategy is in development, to be released in 2023. CM is expected to be critical to 5 key pathways: decarbonizing heavy industries & power; low-carbon H2 production, CDR, and CO2 based industries.
- Canada’s GHG Offset Credit System Regulations: A DACCS protocol is under development and BECCS has been identified as a priority for the next round of protocol development.
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