The Trudeau government denies wanting to subsidize the fossil fuel industry through the hundreds of millions of dollars earmarked for the development of carbon capture, storage and use (CSUC). Oil and gas companies are betting heavily on this experimental technology in an attempt to reduce their greenhouse gas emissions while continuing to operate for decades to come.
In its budget presented on Tuesday, Ottawa provided a “carbon capture, use and storage investment tax credit” that is expected to cost “approximately $520 million over five years starting in 2023-2024. “. According to what can be read in the budget documents, the government sees these “technologies” as “an important tool to reduce emissions in high-emitting sectors and help create good jobs”.
This is not the first time that the federal Liberals have supported the development of CSUC projects. In the budget presented in 2022, there was provision for a measure, in the form of a tax credit, to cost $2.6 billion over five years, in part for CSUC projects. And in the 2021 budget, we had included investments of $319 million for “the development and demonstrations aimed at improving the commercial viability of technologies” for capturing, storing and using CO2.2.
It must be said that in the federal climate plan for 2030, it is stated that achieving the objective of carbon neutrality by 2050 would require the deployment of this technology, which essentially consists of capturing CO emissions2 to bury them in the ground.
Production
The fossil fuel industry is also banking on CCUC to reduce emissions from oil and gas development in the coming years. The New Ways Alliance, which brings together oil sands producers, even promoted it at the most recent UN climate conference, at the invitation of the Trudeau government.
It must be said that the fossil fuel industry anticipates growth in oil and gas production over the next few years. Technology development is therefore seen as a way to maintain the exploitation of resources in the long term, while complying with the climate measures provided for by the federal government, including a cap on the sector’s greenhouse gas emissions.
In this context, does the hundreds of millions of dollars in federal support constitute a subsidy for fossil fuels? The office of the Minister of Environment and Climate Change, Steven Guilbeault, did not directly answer our question on this subject.
“Tuesday’s budget is a historic moment for greening the Canadian economy. He introduced no less than five tax credits to encourage investment in clean technologies in Canada, which together represent more than $80 billion. The importance of this measure should not be underestimated, and these investments will accelerate the renewable technologies and electrification of Canada needed to bring us to carbon neutrality,” it explained, in a written response.
For the Bloc Québécois and the New Democratic Party, the public funds devoted to CSUC represent a subsidy to the most polluting industry in Canada. “It doesn’t make sense to give money to companies that have made record profits. We must force them to do what is necessary to protect the environment, instead of giving them billions of dollars,” argued New Democrat Leader Jagmeet Singh.
The Bloc leader, Yves-François Blanchet, who estimates that support for CSUC projects now exceeds three billion dollars, sees in this an envelope paid “directly to the oil industry for extraordinarily expensive technologies which do not work and which do not are not ecological.
Inefficient technology
Équiterre points out that CSUC has not yet proven itself as a tool for reducing greenhouse gas emissions. In a letter sent to the federal government last year, nearly 400 experts also highlighted the fact that this technology remains at the experimental stage and that it will not be able to constitute a solution over the next few years. Public funds would therefore be better invested elsewhere, they insisted.
“Instead of once again rewarding polluters, the government should tax their windfall profits and force them to immediately cap their emissions and then quickly reduce them. The precious public funds that go into the pockets of oil and gas companies should instead be invested in climate solutions such as energy efficiency and renewable energies that reduce our dependence on fossil fuels,” adds the spokesperson for Greenpeace Canada. , Patrick Bonin.
Even the Panel on Climate Change (IPCC) points out in its most recent report that the potential for CSUC for the next few years remains low, at a very high cost, compared to the development of wind or solar energy. . “The deployment and development of CCS technologies (with large-scale storage of CO2 captured) have been much slower than anticipated in previous assessments. The implementation of CCS currently faces technological, economic, institutional, ecological, environmental and socio-cultural obstacles,” reads a previous report, published in 2022.
The IPCC also highlights the carbon sequestration potential of natural environments, such as forests or wetlands. Hence the idea of better protecting these environments, but also of restoring the natural ecosystems degraded by human activity.
With Boris Proulx