Levelling the Playing Field on CCUS Technologies
It’s no great revelation that governments across the world are competing to attract investments, especially in sectors such as green technology. The United States has ramped up its efforts to develop carbon capture, utilization, and storage (CCUS) technology by increasing its incentives. Indeed, the federal government is raising the carbon capture credit by 70% or more, depending on the type of storage or utilization.
While Canada is a leader in CCUS, the United States also has a set of developed, stable, and clear regulations that promote deployment, along with well-established funding, incentives, and private-sector involvement which have already led to an eruption of projects across the country. CCUS technologies are an absolute must when it comes to reducing GHG emissions in many key industries. Unfortunately, the US could pass us by when it comes to developing and deploying these technologies quickly, giving companies that operate in the US a significant competitive edge.
Canada’s investment tax credit is quite simply inferior to its American counterpart, which could lead to projects being redirected to the United States. As we noted last year, a few simple tweaks could improve our own incentives—for example, revisiting the exclusion of enhanced oil recovery (EOR) projects could work to minimize market distortions and enhance competitiveness, thus encouraging uptake by entrepreneurs here in Canada.