Shell Canada says it is implementing its Polaris carbon capture project in Alberta.
The company – the Canadian subsidiary of British multinational Shell PLC – announced on Wednesday that it had made a positive final decision to invest in the project, designed to capture around 650,000 tonnes of carbon dioxide per year from the refinery and the Scotford chemical complex, owned by Shell, near Edmonton.
This is equivalent to around 40% of direct CO emissions2 of Scotford from the refinery and 22% of its emissions from the chemical complex.
Shell did not disclose the monetary value of the Polaris project, but said it is expected to begin operations around the end of 2028.
Shell also announced on Wednesday that it will continue the Atlas Carbon Storage Hub project in partnership with ATCO EnPower. The first phase of Atlas, which will be connected to the Polaris project by a 22 km pipeline, will provide permanent underground storage of CO2 captured by the Polaris project.
Polaris is Shell’s second carbon capture and storage project in Canada. Its first, named Quest, was completed in late 2015 and is also located in the Scotford complex.
The project, which cost $1.3 billion to build, has captured and stored around 1 million tonnes of CO2 per year from the Scotford upgrader since 2015, Shell said.
A new federal tax credit
Shell’s decision to greenlight the Polaris project comes just days after a new federal investment tax credit for carbon capture and storage received royal assent.
This tax credit was first announced in 2022, but its recent finalization means businesses can now apply for and claim the credit to offset the capital costs of building carbon capture facilities.
” That [le crédit d’impôt] was an essential element of the decision [concernant Polaris] », indicated the president of Shell Canada, Susannah Pierce.
There has been a wave of carbon capture proposals in Canada in recent years, although few of them have received a final investment decision.
Carbon capture and storage, which involves capturing and compressing harmful CO emissions2 from industrial processes, and then storing them safely underground, are considered by many to be the best way to decarbonize high-polluting industries such as oil, gas and cement production.
But this technology is very expensive and companies are reluctant to invest money in it without significant support from governments.
Canada’s largest proposed carbon capture project, a $16.5 billion proposal put forward by a group of oil sands companies called New Pathways Alliance, has yet to receive a final investment decision.
Mme Pierce said every project is different, but in Shell’s case, Polaris is a “key part” of the company’s overall decarbonization strategy.
“We are committed to decarbonizing our Scotford facility, we have experience in CCS (carbon capture and storage) from our years of operating the Quest facility,” she stressed in interview.
“With the right combination of tax framework and regulation, we were able to compare the CCS alternative to all other solutions to meet our compliance obligations, and it worked,” she said. added.