Feds Incentivize Carbon Capture in Race to Reduce Emissions

The government’s aggressive targets have forced it to look beyond renewables to reach its goals, one expert says

The Quest carbon capture and storage facility owned by Shell in Fort Saskatchewan, Alberta, in a file photo. The Canadian Press/Jason Franson

A tax credit for carbon capture and storage is one of numerous measures in the federal budget designed to reduce carbon emissions as the clock ticks for the federal government to reach goals it has set for reduced carbon emissions by 2030.

Budget 2022 included a refundable investment tax credit for carbon capture, utilization, and storage (CCUS) projects. From 2022 through 2030, the federal government will refund 60 percent of equipment costs for direct air capture projects, 50 percent for equipment costs of other kinds of CCUS projects, and 37.5 percent for equipment for transportation, storage, and use.