(Reuters) – Alberta, Canada’s largest oil-producing province, will finalize an investment incentive program for emissions-cutting technologies like carbon capture and storage in “coming months,” the province’s energy minister, Brian Jean, said on Tuesday.
Carbon capture and storage (CCS) is seen as a key tool in helping Canada’s high-polluting oil and gas industry slash emissions without cutting back on production, but companies are holding back on final investment decisions because of the high costs involved and have been lobbying for more government support.
An Alberta incentive program, which would work alongside a federal government investment tax credit first announced last year, would be a key step forward for Canada’s nascent CCS industry and could spur projects forward.
Jean said the incentives, which will be similar to the existing Alberta Petrochemical Incentives Program, should be designed properly, and he is having conversations with stakeholders.
“We’re going to make sure we do a robust consultation to get it right,” Jean told Reuters in an interview. “If we get it right, that means that we’re going see another economic boom here in Alberta.”
Liberal Prime Minister Justin Trudeau’s federal government is aiming for net-zero emissions by 2050. But oil producers in Canada, the world’s fourth largest producer, are also the country’s biggest polluters.
A number of companies including Enbridge Inc, TC Energy and a group known as the Pathways Alliance, consisting of Canada’s six largest oil sands producers, are proposing to build major CCS storage hubs.
Alberta Premier Danielle Smith instructed Jean in a mandate letter in July to develop an incentive program for technologies including CCS, lithium for batteries and geothermal development.
However Alberta, which also has a net-zero 2050 target, has repeatedly clashed with Ottawa over interim targets and a promised cap on oil and gas emissions that is supposed to be announced later this year.
Since last year, Ottawa and the Alberta government have been urging each other to contribute more public funding to support CCS technology.
(Reporting by Nia Williams, editing by Timothy Gardner)