The Pathways Alliance carbon capture and storage (CCS) hub – a project aiming to store emissions from 14 oil sands facilities in Canada, is struggling to get a key tool in place to secure certainty in revenues for investors, reports Reuters in an exclusive coverage of the news.
According to Reuters, the Canada Growth Fund – a body set up last year by the Finance Ministry to help attract private investment in clean tech by mitigating financing risks, has told the Pathways Alliance – a collaboration of the six largest oil and gas producers in Canada and the developer of the hub, that their carbon capture project is too large and risky for a contract for difference, a tool which would lock in future carbon credit prices.
The contract for difference sets up a minimum price for the carbon credits generated by the project which gives investors in carbon capture and storage certainty about their future revenue.
Pathways Alliance is reportedly still in talks with the Canadian government to set up such a contract, even though likely not through the C$15 billion ($11 billion) Canada Growth Fund. As per the government, the Growth Fund might not be equipped to handle some projects, said a Pathways representative to Reuters.
“We sincerely do want to figure out a path to work with them,” said a finance ministry official, not authorized to speak on the record.
According to Jessica Eritou, a spokesperson for the Finance Ministry, the government and the Growth Fund are speaking with many commercial project proponents to understand the demand for carbon contracts for difference, and how “we can best facilitate these.”
Some other industries are counting on them, calling them vital to attracting foreign investment. “We need to have the details finalized and to get some contracts in place before we have the level of certainty that’s needed to get some of that foreign capital into our country,” claims Adam Auer, president of the Cement Association of Canada.