Achi news desk-
Canada’s energy minister is defending carbon capture and storage technology as effective and affordable, after an Alberta power company walked away from a proposed project and a study found another project received public subsidies to cover more than three-quarters of its costs.
“Carbon capture and storage technologies are improving and, over time, they’re actually getting cheaper just like all other technologies that go through the cycle,” Jonathan Wilkinson said on Tuesday.
“For those who say that the technology itself is unproven, I would say to them that is not the case. The technology, the underlying technology, has been around for a long time. It’s a matter of scale and it’s a matter of cost and both of those things are actually happening.”
Carbon capture, use and storage, also known as CCUS, are systems that capture carbon emissions at their source and then funnel them back underground. They are expected to play a key role in Canada’s climate plan, which cannot meet its targets and continue to produce the oil and gas that underpins a significant portion of the Canadian economy.
The climate plan estimates that carbon capture will account for up to 16 million tonnes of emissions reductions by 2030, or around five per cent of the additional emissions reductions needed to reach the next target in 2030.
The International Energy Agency expects that CCUS will need to account for 15 percent of global emissions reductions by 2050 to achieve net zero, where all emissions are eliminated or captured.
“Increased use of CCUS is a feature of the mix of all credible pathways to achieve net zero by 2050, including all 1.5 C pathways developed by the United Nations Intergovernmental Panel on Climate Change and the (International Energy Agency),” a plan Canadian climate reads.
But in Canada, that growing use is proving complicated.
The latest national emissions report published last week shows that as of 2022, Canada has sequestered a total of 7.2 million tonnes of carbon dioxide since 2017, most of it at Shell Canada’s Quest CCS facility at its Scotford upgrader to north of Edmonton.
Shell paid about three-quarters of Quest’s $1.1 billion capital and operating costs through provincial and federal subsidies, and the rest came from the sale of carbon credits generated by capturing carbon emissions.
The email you need for the day’s top news stories from Canada and around the world.
A Greenpeace study released this week found that, in order to make ends meet, the company was allowed by Alberta to sell twice as many credits as it actually earned.
A Shell spokesperson said in a statement to The Canadian Press on Wednesday that the additional credits are “an innovative mechanism to make investment in the Quest CCS project possible.”
However, Stephen Doolan said the double carbon credits are only allowed until the project’s costs break even and all additional credits earned by Shell are used to meet its own emissions requirements in Alberta. They were not sold to any other companies, Doolan said.
Quest has now captured a total of nine million tonnes of carbon, he said.
“Without the various incentives to make the project investable, this would not have happened,” he said.
Last week, Capital Power, an Edmonton electricity generator, scrapped a $2.4-billion carbon capture system planned for its Genesee generating station because the economics didn’t work. A statement from the company in its quarterly earnings report on May 1 said that while carbon capture was “technically feasible” the company did not believe the project was “economically feasible.”
The decision comes even as the Alberta government promises to pay up to 12 percent of the costs and the federal government as much as half through a new tax credit.
Additional security was being tested with carbon contracts for difference under the new Canada Growth Fund. Such contracts help ensure a robust carbon market for credits generated by technology such as carbon capture and storage.
The uncertainty about whether the federal carbon price will be maintained by future governments undermines confidence that such markets will exist or that high enough prices will be achieved for the credits. Investments only make sense if companies can get certainty about the price they can sell those credits for.
Capital Power has not yet been able to negotiate a contract for a difference.
Wilkinson said the cancellation should not be seen as a sign against carbon capture.
“There are a number of different routes for Capital Power to be able to meet the requirements of the clean fuel or clean electricity regulations that will eventually come into force,” he said.
“They’ve made a business decision that they can actually meet those requirements in a different way. But as I said, there will be many different approaches in different sectors that, in my opinion, will use carbon capture technology.”
The Alberta government blamed Capital Power’s decision on the fact that Ottawa has yet to put the carbon capture tax credit in place.
The credit was first promised three years ago but took several years to design, and was included in the legislation to implement the fall economic statement in November.
That bill has not passed yet. It’s up for debate again this week.
& copy 2024 The Canadian Press
