Ottawa defends carbon capture technology
O T TAWA Canada's energy minister is defending carbon capture and storage technology as both effective and affordable after an Alberta power company walked away from a planned project and a study found that another project got public subsidies to cover more than three-quarters of its costs.
“Carbon capture and sequestration technologies are getting better and, over time, they actually get less expensive just like every other technology that goes through the cycle,” Jonathan Wilkinson said Tuesday.
“For those that say that the technology itself is not proven, I'd just say to them that's not true. The technology, the basic technology, has been around for a long time. It's a matter of scale and it's a matter of cost and those are both things that are actually happening.”
Carbon capture, utilization and storage, also known as CCUS, are systems that trap carbon emissions at their source and then funnel them back underground. They are expected to play a key role in Canada's climate plan, which cannot meet its targets and continue to produce the oil and gas that underlie a significant portion of Canada's economy.
The climate plan estimates carbon capture will account for up to 16 million tonnes of emissions reductions by 2030, or about five per cent of the additional emissions reductions needed to meet the next target in 2030.
The International Energy Agency expects CCUS will need to account for 15 per cent of global emissions reductions by 2050 to achieve net-zero, where all emissions are eliminated or captured.
But in Canada, that increased use is proving to be complicated.
The latest national emissions report published last week shows that as of 2022, Canada had captured and stored a total of 7.2 million tonnes of carbon dioxide since 2017, most of it at Shell Canada's Quest CCS facility at its Scotford upgrader north of Edmonton.
Shell covered about three-quarters of the $1.1 billion capital and operating costs for Quest through provincial and federal subsidies, and the rest came from the sale of carbon credits generated through the trapping of carbon emissions.
A Greenpeace study released this week found that to make ends meet, the company got permission from Alberta to sell twice as many credits as it actually earned.
A Shell spokesman said in a statement to The Canadian Press Wednesday that the extra credits were an “innovative mechanism to make investment in the Quest CCS project possible.”
However, Stephen Doolan said the double carbon credits were only allowed until project costs broke even and all additional credits Shell earned were used to meet its own emissions requirements in Alberta. They were not sold to any other companies, Doolan said.
Quest has trapped a total of nine million tonnes of carbon, he said.
“Without the various incentives to make the project investible, this would simply not have happened,” he said.
Last week, Capital Power, an Edmonton electricity generator, scrapped a $2.4-billion carbon capture system planned for its Genesee generating station because the economics didn't work. A statement from the company in its quarterly earnings report on May 1 said that while carbon capture is “technically viable” the company did not believe the project to be “economically feasible.”