Canada’s main oil-producing province Alberta on Tuesday said it would provide a 12% grant on eligible capital costs associated with building new carbon capture utilization and storage (CCUS) projects to help the oil and gas sector hit decarbonization targets.
The incentive from Alberta comes on top of a federal government CCUS tax credit announced last year.
Canada, the world’s fourth-largest oil producer, is aiming to cut emissions 40-45% below 2005 levels by 2030 but will struggle to hit that target without significant reductions from Alberta, the country’s oil and gas heartland and highest-polluting province.
Alberta Energy Minister Brian Jean said CCUS is the “only viable option” to cut emissions of hard-to-abate industries, including oil and gas and petrochemicals.
“Not only will this technology help preserve our position as a major bitumen producer, but our whole economy will depend on CCUS for large volumes of reduced emissions reductions,” Jean told a news conference.
Alberta Premier Danielle Smith said the incentive program was expected to help attract C$35 billion ($25.80 billion) in capital investment in the province.
(Reporting by Nia Williams Editing by Chris Reese and Aurora Ellis)