Prime Minister Justin Trudeau unveiled a 50-per-cent tax credit aimed at spurring investment in carbon capture and storage technologies — one the largest and most eagerly anticipated tax code measures outlined in the federal government’s new fiscal plan.
The credit would reduce the large, upfront capital costs involved in constructing carbon capture, utilization and storage (CCUS) projects for heavy emitters, and could potentially have a huge impact on emissions output from the oil and gas, cement, chemicals, manufacturing, and power generation industries.
The refundable investment tax credit for businesses will cover 50 per cent of the cost of equipment to capture CO2 through conventional CCUS projects beginning in 2022, and is expected to cost the federal government $2.6 billion in the first five years of the program.
An additional credit of 37.5 per cent would cover equipment for transportation, storage and use of carbon dioxide emissions.
The Trudeau government’s new fiscal plan also includes a 60-per-cent credit for investment in direct air capture technologies to remove carbon from the atmosphere. Direct air capture projects are far less common than CCUS, which is focused on retrofitting fossil fuel-based power and industrial plants to capture emissions at their source.
To prompt businesses to begin building the projects sooner, the federal government…
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