The 2022 budget tabled Thursday earmarks $2.6 billion over the next five years — and then $1.5 billion annually until 2030 — to push companies in sectors like oil and gas to spend money on eligible carbon capture, utilization and storage projects.
The new tax credit, first promised in last year’s budget, will be available this year for CCUS projects that “permanently store” greenhouse gas emissions in eligible ways.
The new funding to spur the adoption of CCUS is further evidence that the government is relying in part on the emerging technology to meet its goal of slashing national emissions to at least 40 per cent below 2005 levels by 2030.
Not all environmental groups oppose the measure, however.
Left-leaning opposition parties are also opposed to the idea.
The oil and gas industry accounted for 26 per cent of Canada’s greenhouse gas emissions in 2019, more than any other sector of the economy, according to the most recent data.
The budget makes the case that this money is sorely needed to ensure Canada achieves its ultimate goal of “net-zero” emissions — when remaining pollution is eliminated by CCUS or natural carbon sinks.
The budget spells out an additional $12 billion in spending on climate action stretched over the next eight years.