Today, the Department of Finance is launching consultations with stakeholders on the recent federal budget’s proposal to introduce a new investment tax credit for capital invested in carbon capture, utilization, and storage (CCUS) projects. Canadian innovators and engineers have developed some of the leading global technologies for CCUS, which are in demand as more countries take action to fight climate change. Investing in these technologies today is a significant step towards achieving Canada’s climate targets—and a greener, more resilient future for all Canadians.
June 7, 2021 –Â Ottawa, Ontario –Â Department of Finance Canada
Today, the Department of Finance is launching consultations with stakeholders on the recent federal budget’s proposal to introduce a new investment tax credit for capital invested in carbon capture, utilization, and storage (CCUS) projects. Canadian innovators and engineers have developed some of the leading global technologies for CCUS, which are in demand as more countries take action to fight climate change. Investing in these technologies today is a significant step towards achieving Canada’s climate targets—and a greener, more resilient future for all Canadians.
CCUS is an important tool for reducing emissions in high-emitting sectors. It uses advanced technologies to capture carbon dioxide emissions from fuel combustion, industrial processes, or directly from the air. The captured carbon can then be used to create new and innovative products or stored deep underground.
The federal government intends for the new investment tax credit to be available for a broad range of CCUS applications across different industrial subsectors (e.g. concrete, plastics, fuels), including blue hydrogen projects and direct air capture projects, but not enhanced oil recovery projects. The government is seeking input from all industrial subsectors, recognizing that various subsectors face different challenges in adopting CCUS. The consultation will include key provincial governments, as part of efforts to encourage complementary measures for CCUS projects in their respective jurisdictions.
The CCUS investment tax credit will be available starting in 2022. On the same timeline, the government will also determine how comparable tax support could be provided to producers of green hydrogen.
Stakeholders are invited to provide comments on the government’s proposed approach by September 7, 2021. Details regarding how to participate are found in the related link below.