Economic Potential of DACCS and Global CCS Progress
4.1 REGIONAL OVERVIEW: AMERICAS
The Americas, particularly North America, continue leading the world in CCS deployment.
In the US, the Biden Administration finds that achieving an equitable transition to a net-
zero economy by 2050 must include policies that provide significant funding for cutting-
edge technologies to safely and efficiently capture, remove, and store carbon dioxide.
Carbon capture and storage has bipartisan political support in the US. Likewise, in
Canada, CCUS is critical in its economic and environmental path to meeting its net-zero
by 2050 objective. The role of environmental, social, and governance (ESG) principles
continues to increase.
NORTHWEST TERRITORIES
Territorial carbon tax
SASKATCHEWAN
Federal fuel charge, provincial OBPS
on some sectors, federal OBPS on others
ALBERTA
Federal fuel charge, provincial OBPS
BRITISH COLUMBIA
Provincial carbon tax
ONTARIO
Federal fuel charge,
provincial OBPS as of January 1, 2022
CANADA
PROVINCIAL/TERRITORIAL
SYSTEM APPLIES
FEDERAL BACKSTOP
APPLIES IN PART
QUEBEC
Cap-and-Trade
NEWFOUNDLAND AND LABRADOR
Provincial carbon tax and OBPS
PRINCE EDWARD ISLAND
Provincial fuel charge, federal OBPS
NOVA SCOTIA
Cap-and-Trade
NEW BRUNSWICK
Provincial fuel charge,
provincial OBPS as of January 1, 2021
â– FEDERAL BACKSTOP APPLIES IN FULL
OUTPUT-BASED PRICING SYSTEM (OBPS),
A REGULATORY TRADING SYSTEM FOR INDUSTRY
FUEL CHARGE
POLICY
In November 2021, the Province of Saskatchewan announced the eligibility of pipelines
transporting CO2, for CCUS including enhanced oil recovery (EOR), for the provincial oil
infrastructure investment program (OIIP) (1). The province of Alberta also announced
in the fourth quarter of 2021 the Alberta Hydrogen Roadmap, outlining Alberta's
intention to become an international leader in clean hydrogen. CCUS is key in the
roadmap (2). In the first quarter of 2022, the government of Canada released its 2030
Emissions Reduction Plan (3). Canada's goal is to position its industries to be green and
competitive, which includes developing a CCUS strategy to incentivise the development
and adoption of this technology. The plan provides a roadmap for how Canada will
meet its enhanced Paris Agreement nationally determined contributions (NDC) target
to reduce greenhouse gas emissions to 40-45 per cent below 2005 levels by 2030
across the Canadian economy, and puts the country on a path to achieving net-zero
emissions by 2050.
FIGURE 10: CARBON PRICING ACROSS CANADA
Following the release of the plan, Canada issued its 2022 federal budget, which
strongly supports CCUS via an investment tax credit (4). The tax credit rate is 60 per
cent for direct air capture projects, 50 per cent for all other carbon capture projects, and
37.5 per cent for transportation, storage, and use from 2022 through 2030. After that,
from 2031 to 2040, the tax rates drop to 30 per cent, 25 per cent, and 18.75 per cent,
respectively. The tax credit can be claimed by businesses that, beginning 1 January
2022, incur eligible expenses related to purchasing and installing equipment used in a
suitable new project that captures CO2. Companies can claim the tax credit only if they
agree to abide by a validation and verification process, prove that the project meets
CO2 storage requirements, and produce a climate-related financial disclosure report.
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GLOBAL CCS
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