Freeland said the multi-billion dollar tax credit is key to attracting investment in costly carbon capture projects
Finance Minister Chrystia Freeland is confident her government’s new carbon capture tax credit is going to succeed in luring large-scale investment in the technology in Canada. The response from potential investors when the credit was announced, she said, was almost immediate.
“Within 24 hours of tabling the federal budget, I was hearing from major global investors, people who I know from my days at the Financial Times, who said, ‘we read your budget, we want to learn more,’” Freeland said on April 14 at a news conference in Calgary.
“So there is money there to be drawn in.”
Freeland was in her home province of Alberta to sell the Liberal’s 2022 budget and to promote new measures aimed at driving investment in carbon capture, utilization and storage (CCUS) technologies. The deputy prime minister toured a carbon capture research and development facility in Calgary alongside industry executives and provincial officials.
The refundable CCUS investment tax credit will cover half the cost of equipment to capture carbon dioxide, and 37.5 per cent of the capital costs for transportation, storage and use of CO2 emissions — a potentially massive assist to heavy-emitting sectors like oil and gas which are under increasing pressure to lower greenhouse gas emissions.
The federal budget also included a 60-per-cent credit for investment in direct-air capture technologies to remove carbon from the atmosphere.
Justin Trudeau’s government has been criticized for relying too heavily on carbon capture technology in its plans to achieve emissions reductions over the next eight years. Opponents of the technology say it’s unproven and could fail to curb emissions enough to achieve Canada’s target of 40 to 45 per cent below 2005 levels by 2030.
The Liberal government, however, has sided with energy experts, including the International Energy Agency (IEA), who have argued that CCUS technology will be needed globally if industrial countries are to meet their net-zero emissions targets.
Freeland said the multi-billion dollar tax credit is key to attracting investment in costly large-scale carbon capture projects.
“New stage technology is risky,” Freeland said. “I think at this moment, when these new technologies are being developed, this is the moment that we need governments to come in, to give that little push to provide that de-risking, to get these technologies adopted at scale quickly.
“We need to do that because we need to get our emissions down. And frankly, we need to to that because I want to seize a competitive advantage for Alberta and Canada.”
Shell Canada president and country chair Susannah Pierce, who toured the Alberta Carbon Conversion Technology Centre with Freeland, agreed that the tax credit will make a difference.
“I think this is enough to build momentum,” Pierce said in an interview. “When you look at things like the investment tax credit, those are upfront incentives to really make you feel more comfortable that these projects can be economic.”
Once up and running, Pierce said, Shell’s proposed Atlas sequestration hub east of Edmonton could capture up to 10 million tonnes of CO2 per year. Atlas would be Shell’s second carbon capture facility in Alberta. The company’s Quest facility at the Shell-owned Scotford refinery and chemicals plant has been operational since late 2015.
“My company looks at Canada as what we call a mature regime,” Pierce said. “The Quest project, which Shell has been operating for some years now has already captured around seven million tonnes. So CCS is in fact a proven technology.”
Atlas was one of six carbon capture proposals greenlit last month by the Alberta government for further evaluation and negotiations over pore space.
The province is currently under pressure from industry and the federal government to pony up more money to help accelerate the development of CCUS projects. Industry groups like the Canadian Association of Petroleum Producers (CAPP) had previously said they would like to see government support of up to 75 per cent for carbon capture.
“We do want to continue working with the province to find ways that we can be even more supportive,” Freeland said.
“A good step from our perspective would be to ensure that federal and provincial support can be stackable.”
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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.
The stock is now showing a 16.1% gain for the year after rising the past two days.
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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