Slowly but surely, we are moving toward a state where companies planning to build carbon capture and storage (CCS) facilities have the ability to make decisions to put shovels in the ground. Bringing these projects to life in Canada, and globally, will play a big role if we are to actually make a dent in the 38 million tonnes of carbon dioxide released into our atmosphere each year by Canadians alone. 

The Government of Canada’s consultation period on its draft legislation for an investment tax credit (ITC) for new CCS projects ended September 8, with many watching for what the next steps will be. The timing of those ‘next steps’ will prove key as to whether or not Canada can meet its defined climate targets of a 40-45 per cent reduction in emissions by 2030 compared to 2005 levels.

The ITC is the federal government’s central CCS support vehicle, designed to give heavy industry what it needs to build CCS projects by covering 50 per cent of project capital costs between 2022 and 2030.

To give you a sense of the scale needed to try and slow the pace of CO2 emissions, the Canadian government wants to see projects to capture between 15 and 20 million tonnes of CO2 per year built by 2030 — a tripling of what we currently capture.  It’s a huge task.

Globally, the challenge becomes even more stark. The International Energy Agency says global CCS capacity must grow to more than 800 million tonnes a year by 2030. Currently, only about 40 million tonnes are being captured. The CCS industry must grow by more than a factor of 100 by the year 2050 to achieve Paris Agreement climate targets. This means building 70 to 100 facilities annually, or one 400,000-tonne plant every eight days between now and 2050.

Through its ITC legislation and other proposed policy tools, Canada doing its part to contribute to the boom of necessary CCS projects needing to be built. And while the cost to build these major infrastructure pieces is significant – the opportunities they represent for communities, and the country as a whole, are staggering.

As one example - a review by our organization of the draft regulations found that in order to receive the largest possible tax credit, developers must meet two main labour requirements: pay workers equivalent union-scale wages and ensure 10 per cent of the labour is done by apprentices.

The added benefit outside of tackling climate change is a tremendous boost for those who are starting their careers in skilled trades, as well as experienced workers being in high demand as these large-scale capital projects ramp up in the years ahead.

Indeed, CCS and other emissions reduction projects are some of the largest investments being planned across Canada’s heavy industries. Virtually all the country’s resource-based firms — from cement, steel and fertilizer manufacturers to mining, electricity, and oil and gas — are looking to add CCS. Each one of these projects represents the potential for thousands of high-quality jobs, economic partnerships with Indigenous groups and ongoing employment for running and maintaining these facilities, many of which are the lifeblood of local communities.

There is a caveat to this rosy picture, however, as it is critical government and industry make plans to ensure adequate qualified tradespeople and apprentices are available given the short timeframe of eligibility for the full ITC prior to 2030. With the typical lead time to plan, build and bring a one-megatonne CCS facility into service being at least six years, it is no secret that a serious scramble for workers is shaping up, particular in western provinces where CCS projects – many of which will be located outside of urban centres – are moving towards final investment decisions.

You don’t have to think back very long to find the parallels that exist with the boom in Canada’s oil and gas sector that took place earlier this century. Certainly, we should take steps to avoid a repeat of the labour shortages, housing crises, unrealistic wages and incentive structures, and the myriad other challenges that accompany overheated economies, if at all possible.   

If there is one thing we know, it’s that leveraging our knowledge and experience from the past leads to greater success in the future.

Canada’s leadership in building the first generation of CCS facilities has given us a competitive advantage. It is up to our generation to ensure we don’t squander it – not just for our own benefit, but for the good of everyone on this ever-warming planet.

This article was originally published in the Calgary Herald on Sept. 13, 2023