Govt to dish out millions to kickstart 11 carbon capture projects with potential to generate $20 bln

Emissions Reduction Alberta (ERA) has revealed that the government of Canada’s province Alberta will invest over $40 million in 11 projects focused on advancing carbon capture utilisation and sequestration (CCUS) to accelerate Alberta’s transition to a low-emissions future.

On July 13, 2022, Emissions Reduction Alberta and the government of the province in Western Canada announced the approved projects for the Carbon Capture Kickstart: Design and Engineering funding opportunity. The funding will advance CCUS-related technologies in step with emerging policies with many of these projects representing the first stage of “significantly larger” overall project plans. According to ERA, all funded projects plan to be up and running by 2030.

Sonya Savage, Alberta’s Minister of Energy, remarked: “We are serious about advancing and commercialising CCUS technologies in this province. There’s a reason Alberta has been the host of several world-first commercial projects. Carbon Capture Kickstart is another important investment that will help enhance the competitiveness of our energy sector and strengthen Alberta’s position as a world leader in developing CCUS technologies.”

If the investment turns out to be successful, these projects could lead to over $20 billion in capital expenditures, create thousands of jobs, and reduce about 24 million tonnes of emissions annually, which is the equivalent of reducing Alberta’s annual industrial emissions by almost 10 per cent, explained ERA last Friday.

Projects which will receive the funding represent industrial sectors including power generation, cement, fertilizer, forest products, and oil and gas. ERA says that large emitter sites across Alberta, from Medicine Hat to the Industrial Heartland, Hinton to Exshaw, and in the Alberta Oil Sands, will participate, while this investment is sourced from Alberta’s Technology Innovation and Emissions Reduction (TIER) fund.

Justin Riemer, CEO, Emissions Reduction Alberta, commented: “This significant investment will create a diverse roster of investment-ready projects, support shared learnings about the economic and emissions reduction potential of this critical technology, and position Alberta and Canada to develop and deploy the CCUS technologies the world needs.”

Furthermore, this investment is anticipated to help position companies in Alberta to take advantage of the federal government’s tax credit for capital invested in CCUS projects starting in 2022, along with the government’s carbon sequestration hub approach, and is aligned with the $305 million over four years earmarked by the province for future carbon capture projects. 

Moreover, Natural Resources Canada (NRCAN) is also committing up to $50 million through its CCUS Front-End Engineering Design (FEED) studies funding programme to 11 projects, five of which are Alberta-based projects also receiving funding from ERA. The two worked closely to jointly leverage funds for projects based in Alberta and successful Carbon Capture Kickstart projects include:

• Canadian Natural Resources Limited
  Oil Sands CCUS Pathways to Net Zero
  ERA funding: $5 million
  Project cost: $46.33 million
  Fort McMurray, Alberta
• Heartland Generation Ltd.
  Innovative Integration of Carbon Capture for Clean Power
  ERA funding: $5 million
  Project cost: $38.37 million
• Lafarge Canada
  Exshaw Cement Carbon Capture and Bow Valley Decarbonization
  ERA Funding: $5 million
  Project cost: $27 million
• Capital Power Corporation
  Genesee CCS
  ERA funding: $5 million
  Project cost: $12.35 million
• Strathcona Resources Ltd
  Post-Combustion Flue Gas Carbon Capture at Cold Lake Region SAGD Facilities
  ERA funding: $5 million
  Project cost: $10 million
• Entropy Inc.
  Athabasca Leismer Carbon Capture
  ERA funding: $3.3 million
  Project cost: $10.65 million
• Agrium Canada Partnership
  Nutrien Redwater Carbon Capture Study
  ERA Funding: $3.28 million
  Project cost: $12.6 million
• ENMAX Energy Corporation
  Shepard Energy Centre Carbon Capture Unit FEED Study
  ERA funding: $3.06 million
  Project cost: $6.11 million
  Calgary, Alberta
• City of Medicine Hat
  Project Clear Horizon
  ERA funding: $2.5 million
  Project cost: $5 million
  Medicine Hat, Alberta
• Vault 44.01
  Hinton Bioenergy Carbon Capture and Storage Project
  ERA funding: $2.49 million
  Project cost: $15.58 million
• Suncor Energy Services Inc.
  Svante’s CO₂ capture process for Suncor’s Fluid Catalytic Cracker
  ERA funding: $950,000
  Project cost: $9.9 million

Kendall Dilling, President, Pathways Alliance, stated: “Collaboration and support for Pathways Alliance’s ambitious carbon capture and storage project from governments and forward-thinking agencies such as Emissions Reduction Alberta is vital for helping Canada meet its climate goals. These efforts will help ensure our country is the world’s preferred supplier of responsibly produced energy.”

ERA further elaborated that these 11 projects were selected through its competitive review process, which involved a team of experts in science, engineering, business development, commercialisation, financing, and greenhouse gas quantification, who conducted “an independent, rigorous, transparent review” overseen by a Fairness Monitor.

Greg Retzer, Senior Vice President, ENMAX Energy, said: “ENMAX is pleased to receive funding from Emissions Reduction Alberta to support our FEED study at Canada’s benchmark facility, Shepard Energy Centre. The FEED study will help advance the technology and financial analysis for adding a carbon capture unit at Canada’s largest commercial-scale natural gas combined-cycle facility.”

Those who have received ERA funding are required to produce a final outcomes report that is shared publicly for the broader benefit of Alberta, as well as other funding proposals. In addition, they will be required to report on project outcomes, achievements, and lessons learned including GHG reductions, job creation, and other environmental, economic, and social benefits.

Brian Vaasjo, President and CEO, Capital Power, explained: “ERA and the government of Alberta play an integral role in supporting industry to advance leading-edge technologies that will help decarbonise our economy while enhancing competitiveness. The Genesee CCS project is anticipated to capture up to three million tonnes of CO2 per year and would make the repowered Genesee 1 and 2 units a near-zero emitting source of firm, dispatchable capacity supporting Alberta’s pathway to decarbonisation.”

Since it was established in 2009, ERA has committed $830 million toward 230 projects worth $6.6 billion that are helping to reduce GHGs, create competitive industries and lead to new business opportunities in Alberta. These projects are estimated to deliver cumulative GHG reductions of 40 million tonnes by 2030.