Canadian carbon capture credits

Canadian carbon capture credits

June 15, 2021 | By Keith Martin in Washington, DC

Carbon capture projects may get a boost in Canada.

The latest federal budget proposes adoption of an investment tax credit to encourage carbon capture projects, but the details are still being worked out.

The credit would take effect next year.

Canada captures about four million metric tons of carbon dioxide a year currently. It hopes a tax credit will help it increase the figure to 15 million metric tons a year.

The rate for the tax credit has not been set yet. Captured emissions could not be used for enhanced oil recovery, but rather would have to be buried underground.

The Department of Finance asked in early June for input about various issues that bear on design of the incentive. They include how large a tax credit is needed to get to 15 million metric tons of CO2 captured and put in underground storage a year, what types of projects should qualify, and what financing structures are being used currently in Canada to finance such projects.

Comments are due by September 7.