From 2022 through 2030, the investment tax credit rates would be set at 60% for investment in equipment for direct air capture projects, 50% for equipment in all other carbon capture projects, and 37.5% for transportation, storage and use.
Carbon capture projects permanently store carbon dioxide emissions before they are released into the atmosphere.
With carbon-intensive businesses facing growing scrutiny from climate-conscious investors, Canada’s oil sands companies announced a goal to achieve net zero carbon emissions from operations by 2050, mostly through carbon capture projects with government support.
The country’s largest producers have formed a group called the Oil Sands Pathways to Net Zero, and estimate carbon capture projects will cost about C$75 billion over three decades.
“With this announcement, the federal government has recognized the importance of developing new technologies to help Canada fight climate change, as well as the importance of the oil sands to our country’s energy security,” Kendall Dilling, the group’s director, said in a statement.
Canada has a significant opportunity to establish itself as a leader in this area, according to a report led by Toronto-Dominion Bank Chief Economist Beata Caranci.
Apart from energy, resource-rich Canada is also abundant in critical minerals that are essential for industries like electric vehicles, clean technology and computing.
Specific measures to support critical mineral projects include the introduction of a new 30% tax credit for mineral exploration expenses and up to C$1.5 billion in infrastructure investments.