Is the passion for carbon capture and storage waning in Canada?

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Is the drive for carbon capture and storage waning in Canada?

Canada lags behind after US increases financial support for this technology.

< p class="sc-v64krj-0 knjbxw">Oil companies point to Shell's carbon capture facility in Alberta as a model for reducing greenhouse gas emissions.

A year after the myriad of carbon capture and storage (CCS) project announcements, progress is less significant than expected.

The letters CSC are still on the lips of oil companies. A conference devoted entirely to this subject opens Tuesday in Edmonton. In Calgary, another, called Energy Disruptors, is devoting a roundtable to this technology.

However, projects are progressing more slowly than expected, acknowledges Suncor climate policy manager Martha Hall Findlay. The company has a huge carbon capture and storage project in collaboration with five other oil companies within the Pathways alliance.

To move forward, this alliance needs more financial and political support from the federal and provincial governments.

The question is not just about wanting to reduce the emissions as soon as possible. The problem, to build the infrastructure we need, it takes a long time in Canada, says Martha Hall Findlay.

This summer, the United States put a little more pressure on the demands of Canadian companies. President Joe Biden's environmental reform, passed in mid-August, increased financial incentives for CCS projects south of the border.

The price per tonne of CO2 sequestered increased from $50 to $85. The tax credit for direct atmospheric capture has been increased to $180 per tonne of CO2. Even projects that use carbon dioxide to recover oil get a tax credit of $60 per ton.

On the contrary, this type of use of technology is not provided for in the tax credit announced by the Canadian government. The tax credit, which is still the subject of consultation, will apply only to the costs of setting up the infrastructure.

There is much more certainty and clarity in the United States, summarizes Heather Leahey, vice-president in the research team of the firm Enverus. In Canada, the puzzle is made up of several pieces that work together, but are also more risky.

According to analysts say US environmental reform has made clear President Joe Biden's support for carbon sequestration technology.

Associate Director of Energy at EY Canada, who attends the Energy Disruptors conference, Lance Mortlock, likens US and Canadian policy to a carrot and stick strategy. The United States rather uses the carrot to encourage companies to use CCS, while in Canada we use the stick with the carbon tax, for example, he explains.

According to Heather Leahey, the latter does not offer enough certainty to companies. If there is a change of government, there will be a change in the carbon tax. This creates a mix of hesitation and uncertainty, she says.

Martha Hall Findlay says this situation has resulted in the United States taking a lengthy d ahead, while Canada is falling behind.

What the federal government has done with the budget is fantastic and an important step, but now we can look at what is being done in the United States. There is a lot of pressure on the federal and provincial government to increase support, she acknowledges.

As Canadian companies are urging governments to emulate the American approach, voices to stop public funding of this technology.

Earlier this month, the Australian think tank Institute for Energy Economics and Financial Analysis published a study titled The Carbon Capture : The Illusory Dream of Decarbonization.

Examining 13 of the world's largest CCS projects, the report demonstrates that the vast majority are not meeting the carbon sequestration targets that these projects set out to achieve.

Bruce Robertson, one of the study's co-authors, points out that even projects that achieve their goals, such as Shell's Quest project in Canada, produce emissions to capture and sequester emissions, which partially negates the interest of CCS.

In the end, it is a technology that creates emissions, not reduces them, he summarizes. Over the past 50 years it has escalated and failed and yet [companies] still manage to get government support.

It is not the only one to ask for proof that the technology works before millions of dollars of public money is invested in it.

At the beginning of the year, 400 academics asked the federal government not to subsidize the establishment of CCS projects. The British non-governmental organization Global Witness has also questioned the record of Shell's Quest facility.

Martha Hall Findlay leads greenhouse gas emissions reduction efforts at Suncor.

Martha Hall Findlay does not believe these demands carry much weight. According to her, the more technology is used, the more it improves and proves its effectiveness.

We know that it works, but it is expensive. This is why we need collaboration with the government, she says citing the Quest project. These voices that are negative are less and less important, and the federal government supports us.

She underlines that, if Canada wants to achieve its climate objectives, it is urgent to act and to help companies like his to set up their project.

Additional details on the investment tax credit will be presented during the economic update in the fall of 2022. The Alberta government did not respond to our questions.

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