Join in: Open until September 7, 2021

In Budget 2021, the government proposed the introduction of an investment tax credit for capital invested in carbon capture, utilization, and storage (CCUS) projects with the goal of reducing emissions by at least 15 megatonnes of CO₂ annually. Investment is needed to support research and development that will help to advance the technology, lower its costs, and make sure Canada stays ahead of the curve in the global market for CCUS.

The federal government intends for the new investment tax credit 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, to the extent that captured CO₂ is not used in 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.

Key questions for consideration

This consultation seeks input from stakeholders on the design of the investment tax credit for CCUS, including the rate of the incentive, to achieve the government’s goal. Questions for discussion are outlined below. Additional comments or feedback relevant to the scope of this consultation are also welcome.

The government is also requesting information about potential CCUS project proposals from varying industrial subsectors that could contribute to the government’s goal of reducing emissions by at least 15 megatonnes of CO₂ annually.