Opinions are divided on the possible carbon capture tax credit

Amanda Stephenson, The Canadian Press

CALGARY – A new carbon capture and storage tax credit, expected to be released in the federal budget next week, has sparked debate among those who say it will help Canada achieve its carbon reduction goals. oil and gas industry.

Ottawa is expected to announce their carbon capture investment tax credit in the federal budget next week. Although details have not yet been released, the federal government’s emission reduction plan, released Tuesday, said the promotion of carbon capture and conservation projects is in the mix of “all credible way. ” to achieve carbon neutrality by 2050, including the scenarios established by the United States, United Nations and International Energy Agency.

“We should not look at it as a silver bullet. This should not be the starting point for our climate change strategy, ”Environment Minister Steven Guilbeault said in an interview on March 27.“ But (carbon capture) is going to be one of several components, and one of tools in our toolbox. ”

Carbon Capture and Storage (CCS) technology captures greenhouse gas emissions from industrial sources and stores them underground to prevent them from being released into the atmosphere.

It is an expensive technology that has evolved slowly, although it has been around for decades. Only a handful of CCS projects are currently running in Canada, but there are many proposals, including those from Enbridge, ATCO, TC Energy, Capital Power and Pembina Pipeline.

In addition, the Carbon Neutral Oil Sands Initiative – an alliance of Canadian Natural Resources, Cenovus Energy, ConocoPhillips, Imperial Oil, MEG Energy and Suncor Energy – is proposing a transmission line that will extract carbon dioxide carbon from oil sands facilities and it will be taken to a storage facility near Cold Lake, Alberta.

This project alone could reduce emissions by approximately 10 million tonnes and could be operational by the end of the decade, argued Mark Cameron, senior adviser to the Initiative, who works for MEG Energy.

But he added that companies need the help of a tax credit to make the project economical.

“We are competing for international capital for these projects,” Cameron said. “And jurisdictions like the United States, like the Netherlands, like Norway, have very good financial rules for carbon extraction and storage.”

According to the Pembina Institute, an environmental think tank, extracting and storing carbon from oil sands, refineries and gasworks facilities could reduce Canada’s emissions by 15 million tonnes by 2030.

The emissions reduction plan filed by the federal government on Tuesday projects that total emissions from the oil and gas sector – including production, refining and pipeline transportation – will drop to 110 million tons by 2030. , compared to 191 million tonnes in 2019.

“Carbon extraction plays an important role in decarbonizing the oil and gas industry,” said Simon Dyer, deputy executive director of the Pembina Institute. “We still don’t know the details about the investment tax credit. But we are not opposed to this type of investment to, in a way, revive this industry.

Another form of subsidy

However, other environmental organizations are calling on the Trudeau government to drop the promised tax credit. They argue that funding carbon extraction and conservation projects is just one way to subsidize the oil and gas industry.

“I understand that the government is under a lot of pressure from industry, especially oil and natural gas, which continues to hope that there is some kind of technological solution that does not include a reduction in the volume of oil and natural gas. which we take, ”said Sven Biggs of the Stand.Earth group. “But so far science doesn’t support that view.”

Mr. Biggs explained that his organization would rather spend federal money on advancing renewable energy technologies and relocating oil and natural gas workers to affected communities, rather than offering credit for taxes on oil companies that currently reap record profits due to high commodity prices.

“Accelerating the electrification of things, like our trucks and heavy-duty fleet, will do more to reduce emissions and reduce our dependence on oil and natural gas in the long run,” he said.

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