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$5.7 billion: This figure represents the cost, over six years, of the investment tax credit (ITC) for capital invested in carbon capture, utilization and storage projects in Canada ( CUSC).
The calculation for the period 2022-2028, which has just been published by the Parliamentary Budget Officer, gives us an idea of the CII bill for the federal government, which had initially included this measure dear to the energy industry fossils in its 2021 budget.
In Budget 2023, the government expanded eligibility for this tax credit, so the calculations have been revised to take these changes into account. And the results show that the annual bill will increase from $110 million in 2023-2024 to more than $2.1 billion in 2027-2028.
Spokesperson for the Climate-Energy campaign at Greenpeace Canada, Patrick Bonin believes that it is first and foremost a “big gift to the oil and gas industry”.
At the other end of the spectrum, New Ways Alliance, which brings together tar sands oil companies, argues that investments in capturing and storing greenhouse gas emissions are the way forward to enable the most polluting industry in Canada to achieve “carbon neutrality” by 2050.
In its climate plan, the Trudeau government says that achieving the carbon neutrality objective would require the deployment of this technology, which mainly consists of capturing CO2 emissions to bury them in the ground. Ottawa also denies wanting to subsidize the fossil fuel industry.
In total, Ottawa intends to spend $12.5 billion by 2035 to try to develop these technologies. These amounts are consistent with the liberal promise to invest one and a half billion per year in this type of project from 2026-2027.
False solution?
The Intergovernmental Panel on Climate Change (IPCC) underlines in its most recent report that the potential of CUSC for the coming years remains low, at a very high cost, compared to the development of wind or solar energy. .
In a report released last November, the International Energy Agency concludes that oil and gas companies must start “abandoning the illusion” that “implausible” amounts of carbon capture are the solution to the climate crisis worldwide.
The report says limiting global temperature rise to 1.5°C would require 32 billion tonnes of emissions to be sequestered through carbon capture by 2050.
“The amount of electricity needed to power these technologies would be greater than current global electricity demand,” says the paper, which adds that this amount of carbon captured would require an increase in global spending on the technology from 4 billion last year to 3500 billion by 2050.