Heirloom reposted this
Nothing better than seeing countries compete for climate leadership and building a new energy economy. In the US, the Inflation Reduction Act established a $180 per ton 45Q production tax credit for Direct Air Capture. Yesterday, Canada enacted a 60 percent (!!) investment tax credit for DAC projects’ capex. Canada and the US are now neck-and-neck for DAC incentives. I guess I’ll start to give my friends in Canada a call…
Today the Government of Canada passed Bill C-59, which includes investment tax credits for new carbon capture, utilization and storage projects. We are pleased that the legislation for this critical incentive to encourage CCS investment has been approved, providing much-needed clarity for companies across heavy-emitting industries in Canada to advance their plans for developing CCS projects in a timely fashion. The investment tax credit regime for CCUS (CCUS-ITC) is Canada’s centrepiece for encouraging CCS/CCUS projects, covering 50 per cent of the capital cost of CO2 capture projects between 2022 and 2030. The tax credits are higher (60 per cent) for projects that capture CO2 directly from the atmosphere (direct air capture) and they also cover 37.5 per cent of the cost for facilities required to transport, utilize and permanently store CO2. The Knowledge Centre has published detailed reviews and provided input on the government’s draft legislation for the CCUS-ITC that was released and subsequently updated in the fall of 2023. Our analysis of the draft CCUS-ITC legislation found that there would be strong provisions to support jobs for skilled tradespeople, apprentices and construction workers, as well as requirements for public knowledge sharing by companies that receive the tax credits. Our analysis and input on the CCUS-ITC and other Canadian CCS policy to date is available on our website: https://lnkd.in/gjVRuruY We look forward to the government releasing further details and technical guidance on the implementation of the CCUS-ITC legislation in the coming weeks, and we expect to provide comprehensive analysis and guidance on the policy for industry and stakeholders later this summer. Expansion of large-scale CCS is a priority under Canada’s Carbon Management Strategy, and rapid development of CCS projects will be essential for achieving the country’s current emissions reduction plan that expects national CCS capacity to more than triple, adding facilities to capture and store at least 15 million tonnes of CO2 per year by 2030. When taken as a whole, the suite of CCS-related policies that exist or are in development at the federal and provincial levels provide significant incentive for projects to be built in Canada. While implementation of the CCUS-ITC is an important step forward, it is imperative the government finalize other CCS-related policy measures that will provide greater certainty on the economics of CCS projects, including measures that protect investors from carbon pricing uncertainties.
Brady Paron
2w
Exciting stuff. Your reaction to this makes me even more excited TBH! Come build in Canada ;)
Haysam Azhar
2w
Awesome to see constructive competition!
Executive Director at Carbon Removal Canada | Policy Fellow at Elemental Excelerator | Editor and Host of The Carbon Curve
2wCall any time ;-)