Oil corporations ask Canada to pay for 75% of carbon seize services

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WINNIPEG — Oil and gasoline corporations have requested the Canadian authorities to design a tax credit score to pay for 75% of the associated fee to construct carbon seize services that can curb greenhouse gasoline emissions, the nation’s foremost power trade group stated on Thursday.

The Canadian Affiliation of Petroleum Producers (CAPP) made the request in August to the Division of Finance simply earlier than the federal election marketing campaign, setting the tax credit score at a degree excessive sufficient to supply an financial return, Ben Brunnen, CAPP’s Vice-President of Oil Sands, instructed Reuters.

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Carbon seize services are anticipated to be a key a part of international efforts to comprise emissions from fossil fuels manufacturing. Canada is the world’s fourth-largest oil producer and has a set a objective of producing net-zero emissions by 2050.

The carbon captured from oil and gasoline operations is much less concentrated than that of another massive emitters, resembling fertilizer vegetation. That signifies that seize prices are increased on a per tonne foundation for oil corporations, Brunnen stated.

“Due to that, this (credit score) must be designed to drive a steadiness and mirror the financial realities,” he stated. “The federal government position must be offering the enjoying area to allow corporations to make these investments.”

Prime Minister Justin Trudeau’s Liberal authorities started trade consultations in June on the make-up of its proposed carbon seize funding tax credit score, earlier than the nationwide election final month. Trudeau received a 3rd time period and discussions are anticipated to renew earlier than the federal government finalizes the credit score subsequent yr.

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A spokesperson for Finance couldn’t be instantly reached.

Trudeau’s authorities has not stated what degree of tax credit score it’s contemplating. At 75%, the Canadian credit score could be corresponding to help provided in america, as soon as lawmakers sweeten the American tax credit score, Brunnen stated.

Many environmental teams oppose reliance on carbon seize to deal with international warming, calling it costly and a way of prolonging fossil fuels manufacturing.

“We’re speaking about an trade that created this downside, that additionally made billions of {dollars} during the last 40 years realizing that local weather change is an issue,” stated Cam Fenton, Canada group chief for 350.org.

Though the federal government calls its proposed carbon seize help a tax credit score, CAPP needs it to operate extra as a grant, with Ottawa reimbursing carbon seize proponents a share of their prices as they construct the services, Brunnen stated.

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Canada goals to supply incentives for at the least two large carbon seize hubs https://www.reuters.com/world/americas/exclusive-canada-pushes-build-2-new-carbon-capture-hubs-document-2021-08-30 by 2030 and sequester at the least 15 million tonnes of carbon yearly in whole by that yr. Realistically, Canada would possibly advance two initiatives within the subsequent three years with mixed capability for 3 million tonnes of carbon sequestration per yr, costing about C$3 billion, Brunnen stated.

A number of corporations have stepped ahead with proposals for carbon seize hubs in Alberta, together with Royal Dutch Shell , TC Vitality and a consortium of the 5 largest Canadian oil producers. (Reporting by Rod Nickel in Winnipeg Modifying by Nick Zieminski and Aurora Ellis)