Oil and gas companies have asked the Canadian government to design a tax credit to pay for 75% of the cost to build carbon capture facilities that will curb greenhouse gas emissions, the country’s main energy industry group said on Thursday.
The Canadian Association of Petroleum Producers (CAPP) made the request in August to the Department of Finance just before the federal election campaign, setting the tax credit at a level high enough to provide an economic return, Ben Brunnen, CAPP’s Vice-President of Oil Sands, told Reuters.
Carbon capture facilities are expected to be a key part of global efforts to contain emissions from fossil fuels production. Canada is the world’s fourth-largest oil producer and has a set a goal of generating net-zero emissions by 2050.
The carbon captured from oil and gas operations is less concentrated than that of some other large emitters, such as fertilizer plants. That means that capture costs are higher on a per tonne basis for oil companies, Brunnen said.