Oilpatch welcomes carbon-capture tax breaks
Canada’s largest oil companies welcomed new tax breaks for carbon capture and storage schemes contained in the federal budget, though clean-tech leaders are concerned Ottawa is focused on “moonshots” rather than immediate actions to reduce emissions.
Finance Minister Chrystia Freeland introduced Canada’s first federal budget in two years on Monday, which contained promises of tax breaks for investments in carbon capture, utilization and storage (CCUS) projects as well as $319 million in funding for research and development in
CCUS systems.
Ottawa hopes its CCUS incentives will result in an additional 15 megatonnes of CO2 emissions sequestered annually, which would be roughly seven times what CCUS projects currently capture in Canada each year.
Despite aggressive carbon reduction promises, Canada’s biggest oil and gas producers welcomed the budget and particularly its plans to invest in carbon sequestration and provide tax incentives for CCUS spending.
“The federal budget reinforces the tremendous opportunity for Canadians to work together — across sectors and governments — to build infrastructure that will help Canada to get to net zero. We see carbon utilization and storage as a key enabler in meeting our shared environmental objectives,” Suncor Energy Inc. president and CEO Mark Little said in an emailed statement.
Investment in carbon capture projects will allow Canada to benefit from economic investments by the oil and gas industry while reducing emissions, said Cenovus Energy Inc. president and CEO Alex Pourbaix.
“(The) announcement from the federal government is an important step forward and we look forward to working with them to learn more about their plans so we can advance the important work of decarbonizing Canadian oil production as soon as possible,” Pourbaix said.
Canadian Natural Resources Ltd., which operates two large carbon sequestration projects, including the Quest CCS project at its Scotford oilsands upgrader and the carbon capture system at the North West Refinery, said it’s eyeing opportunities to advance investments in CCUS projects.
“Details of the proposed program are important and we look forward to working together with government through the upcoming consultation period,” the company spokesperson Julie Woo said in an email.