Canada’s federal government has approved British Columbia’s carbon dioxide storage regulations. Companies working on CO2 capture and utilization projects can now apply for the country’s federal investment tax credit to help cover the costs of investing in CO2 capture and storage.
Currently, only Saskatchewan and Alberta are eligible for the credit.
The investment tax credit, which is worth an estimated CAD $8.6 billion (USD $6.32 billion), was proposed in the Federal Budget for 2022 and will allow companies to cover up to 50% of the cost of investing in carbon capture, utilization and storage (CCUS) equipment used for storing carbon underground or injecting it into cement.
Experts from the Environment and Climate Change Canada and Natural Resources Canada last year evaluated whether British Columbia’s regulatory framework meets the international best practices, Canada’s National Observer reported.
The government looked at earthquake risks and other geological considerations and concluded that the province has sufficient regulatory requirements for safe and permanent carbon storage.
Relevant: Canada Looks To Compete With US Carbon Capture Incentives
Recent research from GeoScience BC and the BC Centre for Innovation and Clean Energy established that 4,230 megatons of CO2 could potentially be stored in formations in northeast British Columbia.
According to the federal government’s budget from 2022, enhanced oil recovery was not an eligible use of carbon dioxide. In August, the government published additional details that said CCUS projects using enhanced oil recovery will still be eligible for funding by the credit will be reduced based on how much of the carbon goes toward ineligible uses.
A government fact sheet said “natural gas production is a key driver of economic growth” in British Columbia but processing the gas is a “considerable source” of carbon emissions. Advancing CO2 capture is key so the province can continue to extract gas resources, it also said. According to environmentalists, British Columbia won’t be able to achieve its climate goals if it continues to expand liquified natural gas operations.
Read more: Canada Oilsands Group To Invest $16.5B In Carbon Capture Technology
