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Oil companies ask Canada to pay for 75% of carbon capture facilities


Oil and fuel firms have requested the Canadian authorities to design a tax credit score to pay for 75 per cent of the fee to construct carbon seize services that can curb greenhouse fuel emissions, the nation’s essential vitality business group mentioned on Thursday.

The Canadian Affiliation of Petroleum Producers (CAPP) made the request in August to the Division of Finance simply earlier than the federal election marketing campaign, setting the tax credit score at a degree excessive sufficient to offer an financial return, Ben Brunnen, CAPP’s Vice-President of Oil Sands, instructed Reuters.

Carbon seize services are anticipated to be a key a part of world efforts to comprise emissions from fossil fuels manufacturing. Canada is the world’s fourth-largest oil producer and has a set a aim of producing net-zero emissions by 2050.

Learn extra:
Canada has upped its emissions reductions target. How do we achieve it?

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The carbon captured from oil and fuel operations is much less concentrated than that of another massive emitters, equivalent to fertilizer crops. That signifies that seize prices are larger on a per tonne foundation for oil firms, Brunnen mentioned.

“Due to that, this (credit score) must be designed to drive a stability and mirror the financial realities,” he mentioned.

“The federal government function ought to be offering the enjoying subject to allow firms to make these investments.”

Prime Minister Justin Trudeau’s Liberal authorities started business consultations in June on the make-up of its proposed carbon seize funding tax credit score, earlier than the nationwide election final month. Trudeau gained a 3rd time period and discussions are anticipated to renew earlier than the federal government finalizes the credit score subsequent 12 months.

A spokesperson for Finance couldn’t be instantly reached.


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Trudeau’s authorities has not mentioned what degree of tax credit score it’s contemplating. At 75 per cent, the Canadian credit score could be similar to assist supplied in the US, as soon as lawmakers sweeten the American tax credit score, Brunnen mentioned.

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Many environmental teams oppose reliance on carbon seize to handle world warming, calling it costly and a method of prolonging fossil fuels manufacturing.

“We’re speaking about an business that created this drawback, that additionally made billions of {dollars} during the last 40 years figuring out that local weather change is an issue,” mentioned Cam Fenton, Canada workforce chief for 350.org.


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Though the federal government calls its proposed carbon seize assist a tax credit score, CAPP desires it to operate extra as a grant, with Ottawa reimbursing carbon seize proponents a proportion of their prices as they construct the services, Brunnen mentioned.

Learn extra:
2 new carbon capture hubs could be built in Canada by 2030: government document

Canada goals to offer incentives for no less than two large carbon seize hubs by 2030 and sequester no less than 15 million tonnes of carbon yearly in complete by that 12 months. Realistically, Canada would possibly advance two tasks within the subsequent three years with mixed capability for 3 million tonnes of carbon sequestration per 12 months, costing about C$3 billion, Brunnen mentioned.

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A number of firms have stepped ahead with proposals for carbon seize hubs in Alberta, together with Royal Dutch Shell, TC Power and a consortium of the 5 largest Canadian oil producers.

— Reporting by Rod Nickel in Winnipeg, modifying by Nick Zieminski and Aurora Ellis








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