Canada seeking project ideas to transport and store carbon pollution


Thu, January 26, 2023

Natural Resources Canada (NRCan) is accepting applications for research and development projects as part of a broader federal program supporting the advancement of carbon capture technology in Canada.

The department wants to see projects that focus on transporting and storing planet-heating carbon pollution. These projects might enable permanent CO2 storage near industrial areas that currently have no storage options, explore regions for possible storage locations, help plan CO2 transportation and hubs, and advance knowledge to support future regulations and standards.

NRCan is taking expressions of interest from now until April 17, the department announced Wednesday.

The success of Canada’s goal to reduce greenhouse gas emissions 40 per cent from 2005 levels by 2030 is intertwined with the success of carbon capture technology. The federal government’s climate plan calls on the oil and gas industry to slash emissions 31 per cent relative to 2005 levels by 2030. To do this, about 13 per cent of the sector’s reductions would have to come from carbon capture technology. But the technology is expensive, and existing facilities regularly underperform.

The oil and gas sector is responsible for 27 per cent of Canada’s emissions, making it the most polluting sector.

This latest call for proposals falls under the Energy Innovation Program, which was created to advance clean energy technologies in pursuit of Canada’s climate targets and help the transition to a low-carbon economy. In Budget 2021, the federal government invested $319 million into research, development and demonstrations to advance the commercial viability of carbon capture, utilization and storage (CCUS) technologies.

For-profit and non-profit organizations, companies, utilities, governments, academic institutions and Indigenous groups are all eligible to apply. Successful applicants will be invited to submit a full project proposal to receive funding.

Some types of projects will not be accepted. For example, applicants can’t ask for funding to replicate existing carbon capture facilities or pipelines to transport CO2 — there must be a new, innovative component to the proposal.

Also not allowed are projects focused on non-permanent storage, including enhanced oil recovery, which is when compressed CO2 is injected into depleted oil wells to force out more oil. This is the most common use of captured CO2 worldwide. Selling captured CO2 to companies who use it to extract more oil helps pay for the costly technology, but also enables more oil production at a time when scientists warn the world must rapidly curb emissions and transition away from fossil fuels.

NRCan’s call for projects in August 2021 focused on CCUS engineering and design studies, and 11 projects were selected. A project-by-project funding breakdown is not yet available, but together they represent a total investment of up to $50 million, according to Natural Resources Canada. The selected projects aren’t guaranteed funding and still have to go through a finalization process to negotiate an agreement.

Only the project names are currently available. They show applications from oil and gas companies Cenovus, Canadian Natural Resources Limited, Suncor, Enhance Energy Inc., NorthRiver Midstream Inc. and Strathcona Resources Ltd, among others, were selected. The City of Medicine Hat’s proposal also made the cut.

In July 2022, there was a call for research and development projects related to capture technology, and those applications are currently under review, according to Natural Resources Canada.

A third call for research and development proposals for utilization projects is expected to launch this fall, according to Natural Resources Canada’s website.

A March 2022 report by Environmental Defence found federal and provincial governments had provided an estimated $5.8 billion for CCUS projects since 2000, but the technology only captured 3.55 million tonnes of carbon per year — or 0.05 per cent of Canada’s greenhouse gas emissions. A month later, in Budget 2022, the federal government proposed an investment tax credit covering 50 per cent of equipment costs for CCUS projects. The tax credit is expected to cost the federal government $2.6 billion in the first five years of the program and up to $8.6 billion by 2030.

Natasha Bulowski, Local Journalism Initiative Reporter, Canada's National Observer