Oil and gas companies have asked the Canadian government to create a tax credit to pay 75 percent of the cost to build carbon capture facilities that would curb greenhouse gas emissions, the country’s main energy industry group said Thursday.
The Canadian Association of Petroleum Producers (CAPP) requested the Finance Department in August, just before the federal election campaign, to establish tax credits at a level sufficient to provide an economic return, Ben Brunon, CAPP’s vice president of oil and sands, told Reuters. Told.
Carbon capture facilities are expected to be an important part of Granthshala efforts to control emissions from fossil fuel production. Canada is the world’s fourth largest oil producer and has set a goal of generating net-zero emissions by 2050.
Carbon from oil and gas operations is less concentrated than some other large emitters, such as fertilizer plants. This means capture costs for oil companies on a per ton basis are higher, Brunen said.
“Because of that, this (credit) needs to be designed to drive a balance and reflect economic realities,” he said.
“The role of the government should be to provide a level playing field to enable companies to make these investments.”
Prime Minister Justin Trudeau’s Liberal government began industry consultations in June on the makeup of its proposed Carbon Capture Investment Tax Credit, ahead of a national election last month. Trudeau won a third term and discussions are expected to resume before the government finalizes the credits next year.
A finance spokesperson could not be immediately reached.
Trudeau’s government has not said what level of tax credit it is considering. Brunen said that at 75 percent, Canada’s credit could be compared to the aid being made in the United States, when lawmakers sweetened the US tax credit.
Many environmental groups oppose reliance on carbon capture to address Granthshala warming, calling it costly and a means of prolonging the production of fossil fuels.
Cam Fenton, Canada Team Leader for 350.org, said, “We are talking about an industry that has created this problem, which has made billions of dollars over the past 40 years, knowing that climate change is a problem. Is.”
Although the government calls its proposed carbon capture support a tax credit, CAPP wants it to act more in the form of a grant, with Ottawa reimbursing carbon capture supporters a percentage of their costs as they build the facilities, Brunen said. said.
Canada aims to provide incentives for at least two large carbon capture hubs by 2030 and to sequester at least 15 million tonnes of carbon annually by that year in total. In real terms, Canada could pursue two projects over the next three years, with a combined capacity of 3 million tonnes of carbon sequestration per year, costing about C$3 billion, Brunen said.
Several companies have stepped in with proposals for a carbon capture hub in Alberta, including Royal Dutch Shell, TC Energy and a consortium of Canada’s five largest oil producers.
– Reporting by Rod Nickel in Winnipeg, Editing by Nick Ziminsky and Aurora Ellis