Speak with an expert
Dots Dots

Knowledge Centre

Canada

Canadian government policies on industrial decarbonisation

Net zero target

In 2021, Canada adopted a net zero emissions target for 2050, including a target of cutting emissions by 40-45% by 2030 compared to 2005 and a 2035 target of cutting emissions 45-50%. Canada has led in the development of key policies to support and incentivise industrial decarbonisation, creating the Output-Based Pricing System which sets a price on carbon emissions. The Investment Tax Credit for CCS, and the offering of Carbon Contracts for Difference by the Canada Growth Fund also make Canada an attractive market for investment. Key provinces, especially Alberta, having also supported deployment of CCS at provincial level.
Canada-2030(3)
2030
Reduce GHG emissions by 40% below 2005 levels
h2
2050
Net zero emissions
Further information: Net-Zero Emissions Accountability Act; Nationally Determined Contribution
Key climate policies
Canadian Net Zero Emissions Accountability Act

The Canadian Net Zero Emissions Accountability Act delivers on the government’s commitment to legislate a target of net zero greenhouse gas emissions by 2050. The Act establishes a legally binding process to set five-year national emissions reduction targets for 2030, 2035, 2040 and 2045. It will help develop credible, science-based emissions reduction plans to achieve each target. The Act established an independent advisory body, the Net Zero Advisory Body to provide ongoing advice to the government. 

Further information: Canadian Net-Zero Emissions Accountability Act

Carbon pricing
Federal Output-Based Pricing System (OBPS)

The federal OBPS is designed to put a price on carbon pollution while minimising competitiveness and carbon leakage risks from exposure to the federal fuel charge. The federal OBPS is mandatory for facilities that are primarily engaged in the industrial activities listed in the OBPS Regulations and that emit 50kt CO2 per year or more.

Under previous regulations, the OBPS was to rise by C$15 per tonne annually to a total of C$170 by 2030. However, due to political opposition from several provinces, this is now being revised, with an anticipated maximum of C$130 per tonne at an as yet unspecified future date. The current OBPS price is at $95 per tonne. 

The federal OBPS only applies in Manitoba, Prince Edward Island, Nunavut and Yukon currently. However, all other provinces and territories operate their own pricing systems which reflect an equivalent carbon price and have similar requirements.  

Further information: Carbon pricing systems Canada

Dots
Dots
Funding
Canada Growth Fund and Carbon Contracts for Difference
  • The Fund has wide latitude in the support it is able to offer projects, and has provided carbon contracts for difference, to give pricing certainty to project developers, as well as offtake agreements, and taking equity stakes. 

    Further information: https://www.cgf-fcc.ca/en/

Carbon Capture, Utilization, and Storage Investment Tax Credit
  • The tax credit for Carbon Capture, Utilization and Storage provides a tax credit worth 50% of the capital costs for CCUS equipment incurred up to 2030 – a deadline which will soon be extended to 2035. For capital costs falling after 2035 and before 2041, project developers will be able to claim credits worth 25% of the capital costs. It does not cover operational costs. 

Further information: Tax measures: Supplementary Information

Alberta Carbon Capture Incentive Program (ACCIP)
  • The Alberta Carbon Capture Incentive Program is effectively a ‘top-up’ to the CCUS Investment Tax Credit for projects in Alberta. The program provides a grant worth 12% of the relevant capital costs for CCUS projects. This is in addition to the 50% provided by the federal CCUS Investment Tax Credit. 

Further information: ACCIP  

Emissions Reduction Alberta
  • Emissions Reduction Alberta runs numerous programs to support innovative decarbonisation projects, using revenue raised by Alberta’s TIER carbon pricing system. To date it has invested C$992m across a wide range of decarbonisation technology programs, including CCUS. 

Further information: Emissions Reduction Alberta 

Other decarbonisation policies

Governments worldwide are introducing policies and regulations to deliver industrial decarbonisation, including the deployment of CCUS. Discover more on specific government action, via the links below.
Mask Group 104@2x-1
United States
Mask Group 106@2x
United Kingdom
Mask Group 105@2x
EU/EEA
Back to top
Close
  • There are no suggestions because the search field is empty.