Federal Natural Resources Minister Jonathan Wilkinson recently said that Shell Canada’s decision to greenlight their Polaris carbon capture project is likely to just be the beginning of a wave of investment into carbon capture and storage projects.
He expects up to 25 commercial scale carbon storage and CO2 capture projects to start in Canada within the next 10 years. Now that a new federal investment tax credit for carbon capture and storage projects is in effect, he expects more companies to move forward with their plans in the near future.
According to Wilkinson, it took longer to get the investment tax credit enshrined into law, but companies are now able to apply for it and receive said credit. This new tax incentive is set to cover up to 50 percent of the cost of any carbon capture projects.
New Carbon Capture Projects in Canada
According to him, the Polaris carbon capture project from Shell is a direct result of this credit. The project that Shell is launching will capture approximately 650,000 tonnes of carbon dioxide every year from the Scotford refinery and chemicals complex near Edmonton.
Over the last decade there have been a handful of carbon capture and storage projects in Canada, which according to official research are sequestering roughly 6.4 million tonnes of CO2 every year.
However, this is still a far cry from the proposed reduction of emissions by 45 percent below 2005 levels by the year 2030, and the goal of reaching net zero emissions by the year 2050. According to the 2030 Emissions Reduction Plan, to reach goals, the carbon capture capacity of Canada must increase by 300 percent by 2030.
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According to the International Energy Agency, there are currently over 40 carbon capture projects proposed by Canadian companies, with oil and gas companies seemingly taking the lead.
For example, Pathways Alliance, a group of oilsands companies, proposed investing $16.5 billion to create a pipeline that would transport captured carbon from 14 oilsands sites to a storage location. If completed, this would mark one of the largest carbon capture projects in Canada and the world. Pathways Alliance has not yet made a final decision regarding this investment.
