Alberta to develop CCUS incentive programme [UPDATE]

Alberta Premier Danielle Smith said November 28 her government would develop a carbon capture, utilisation and storage (CCUS) incentive programme that would provide major industries up to 12% of new eligible capital project costs.

The Alberta Carbon Capture Incentive Programme (ACCIP) will build on the C$1.8bn already invested by the government in CCUS and carbon capture and storage (CCS) projects and could yield an estimated C$35bn in new investment in the province over the next decade, Smith told reporters.

“This new programme will further support Alberta’s position as a world leader in CCUS technology while also helping major industries in the province cut emissions and grow the economy,” she said. “It’s been modeled after our highly successful Alberta Petrochemical Incentive Programme and will provide a grant of 12% for new eligible capital costs in order to help industries reduce their emissions by incorporating CCUS into their operations.”

Provincial ACCIP funding – some of which will come from the government’s Technology Innovation Emissions Reduction (TIER) fund – will be available once federal legislation enacting Ottawa’s CCUS investment tax credit is enacted later this fall. That program, originally announced by the federal government in 2021, will offer a 50% tax credit for carbon capture investments and a 37.5% credit on equipment needed to transport and sequester CO₂.

Under terms of ACCIP, a grant of 12% of eligible capital CCUS costs will be paid to operators in three instalments over three years, with the first instalment paid one year after operations begin.

“Alberta is doing its part to encourage CCUS and now we’re calling on Ottawa to cooperate with the provinces and kick-start its investment tax credit to support this important work,” Alberta Energy Minister Brian Jean said. “ACCIP will help ensure Alberta remains competitive internationally, as competing jurisdictions use similar project incentives.” 

ACCIP is expected to cost the government between C$3.2bn and C$5.3bn over the next decade, depending on the development timelines of the large capital-intensive projects that will likely take advantage of the incentives. Programme specifics are still being developed, and more details surrounding ACCIP are expected to be released next spring.

The Alberta government has invested some C$1.8bn in CCS and CCUS developments in the province, including Shell’s Quest CCS project and the Alberta Carbon Trunkline. Those two projects have together captured and stored more than 11.5mn tonnes of CO₂.