Canada’s energy minister, Jonathan Wilkinson, is defending carbon capture and storage (CCUS) technology as effective and affordable, despite recent setbacks in the industry. CCUS systems trap carbon emissions at their source and funnel them back underground, playing a key role in Canada’s climate plan. The plan estimates that carbon capture will lead to up to 16 million tonnes of emissions reductions by 2030, contributing to the overall goal of achieving net-zero emissions by 2050. However, the implementation of CCUS in Canada has faced challenges, with the latest national emissions report showing that only 7.2 million tonnes of carbon dioxide have been captured and stored since 2017.
One of the main projects in Canada is Shell Canada’s Quest CCS facility, which has captured and stored the majority of the carbon dioxide. However, the project received subsidies from both the provincial and federal government, covering about three-quarters of the $1.1 billion capital and operating costs. A Greenpeace study revealed that Shell was allowed to sell twice as many credits as it actually earned, in order to make the project financially viable. Despite the controversy surrounding the project’s financing, Shell claims that the extra credits were essential to make the investment in the CCS project possible.
In contrast, another Alberta power company, Capital Power, recently abandoned a $2.4 billion carbon capture system planned for its Genesee generating station due to economic feasibility issues. The decision comes as both the provincial and federal government were offering to cover a significant portion of the costs through subsidies and tax credits. The uncertainty surrounding the future of carbon markets and pricing also played a role in the cancellation of the project, as companies require certainty in order to make profitable investments in carbon capture technology.
Wilkinson emphasized that the cancellation of the Capital Power project should not be seen as a signal against carbon capture, as there are various pathways for companies to meet clean energy regulations. He mentioned that different sectors may choose to utilize carbon capture technology in different ways to achieve their emission reduction goals. The Alberta government attributed the cancellation to the delay in implementing the promised carbon capture tax credit by the federal government. The ongoing debate over the carbon price legislation further complicates the future of carbon capture projects in Canada.
Despite the challenges faced by the carbon capture industry in Canada, Wilkinson remains optimistic about the technology’s potential to contribute to the country’s emission reduction goals. He believes that as technology continues to improve, the costs associated with carbon capture will decrease, making it a more viable option for reducing emissions. The International Energy Agency also recognizes the importance of CCUS in achieving global net-zero emissions by 2050, emphasizing the need for increased investment and support for the technology. As the debate over carbon pricing and government subsidies continues, the future of carbon capture projects in Canada remains uncertain but hopeful.
