A new analysis out of the International Institute for Sustainable Development (IISD) found that the five carbon capture, utilization, and storage (CCUS) projects currently operating in Canada’s oil and gas sector only capture about 2.7 million tonnes of CO2 equivalent per year – only 1.3% of the sector’s pre-pandemic emissions. Based on this, the IISD claims that providing billions more in additional government support to capture emissions from Canada’s oil and gas production is not aligned with credible net-zero pathways and Canada’s near-term emissions reduction targets.

According to the Intergovernmental Panel on Climate Change, CCUS is one of the most expensive emissions reduction measures due to its high energy needs and the infrastructure required. IISD finds that, to date, the Canadian government has committed at least CAD 9.2 billion in public support for CCUS in the oil and gas sector. This includes a 50% CCUS investment tax credit announced in 2022 projected to cost CAD 8.6 billion over the first eight years—double the financial support for CCUS offered by the U.S. Inflation Reduction Act.

The Pathways Alliance—six companies operating 95% of oilsands production—has asked the federal government to cover CAD 10.9 billion of a CAD 16.5 billion CCUS hub they’ve proposed. To fund this, the group has suggested dipping into the Canada Growth Fund, a CAD 15 billion pot of public money intended to spur private investment in clean technology, as well as other government funds.