Federal government supports carbon capture technology despite cancellation of Alberta project due to high costs

Canada’s energy minister, Jonathan Wilkinson, is standing firm on the effectiveness and affordability of carbon capture and storage technology despite recent setbacks in Alberta. A study revealed that a project received public subsidies covering more than three-quarters of its costs, while an Alberta power company abandoned a $2.4 billion carbon capture system due to economic feasibility concerns.

Wilkinson emphasized that carbon capture and sequestration technologies are improving and becoming more cost-effective over time. These systems play a crucial role in Canada’s climate plan, aiming to reduce emissions and meet climate targets while sustaining the oil and gas industry.

However, challenges persist in the implementation of carbon capture projects. The latest national emissions report showed that Canada has captured and stored 7.2 million tonnes of carbon dioxide since 2017, with Shell Canada’s Quest CCS facility leading the efforts. Shell received subsidies to cover project costs and sold carbon credits to offset expenses.

Despite these efforts, Capital Power’s decision to scrap its carbon capture project highlights the economic challenges facing the industry. The Alberta government’s promise to cover project costs and federal tax credits were not enough to make the project financially viable.

Wilkinson remains optimistic about the future of carbon capture technology, emphasizing the need for diverse approaches to meet clean energy regulations. The delay in implementing the carbon capture tax credit at the federal level has been cited as a factor in project cancellations.

As Canada navigates the complexities of carbon capture and storage, the debate continues on the role of these technologies in achieving climate goals and balancing economic interests.