The Canadian Association of Petroleum Producers (CAPP) has submitted a request to the Canadian government to cover 75% of the costs of building carbon capture facilities for the country’s oil and gas industry, effectively acting as a tax credit.
Carbon capture technology is currently among the main solutions designed to curb greenhouse gas emissions and help address the climate crisis. And its role is only expected to grow in importance over the coming years.
And seeing as how Canada, the fourth-largest oil producing country in the world, has set out to achieve net-zero carbon emissions by 2050, the matter of building carbon capture facilities is a pressing one.
However, CO2 emission that are captured from gas and oil operations are less concentrated and therefore more expensive per tonne of carbon captured in comparison to other major emitters, such as fertilizer plants. For this reason, Canada’s oil and gas companies are advocating for a credit tax that would bring about balance and be reflective of the ‘economic realities’.
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As was stated by Ben Brunnen, CAPP’s Vice-President of Oil Sands, the government should be able to provide a level playing field that would allow companies to make such investments.
The proposal was submitted this summer, just before the national elections, and discussions began on a government level about the carbon capture tax credit, but were put on pause during the election period. And now that Prime Minister Justin Trudeau won a third term, consultations are set to resume and the credit is expected to be finalized by the government next year.
So far, the considered level of the tax credit has not been disclosed. But at 75%, the investment credit in Canada would be the same as the support that oil and gas producers receive in the neighboring United States.