Deep Sky Corp. this summer opened a direct-air capture test centre for several carbon-removal technologies in central Alberta.Supplied
Canadian companies that capture carbon dioxide from the atmosphere to help combat climate change can be leaders in the young sector if Ottawa helps bolster demand and sets up a supportive market framework, a global industry coalition says.
The country has the technology and natural advantages to take the industry beyond its current pilot projects, said the Carbon Business Council, which represents more than 100 carbon-dioxide removal, or CDR, companies worldwide.
But it will need federal help unlocking that potential to be a competitive force and tool for helping to reach Canada’s net-zero target.
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The council lobbies on behalf of cleantech players that extract CO2 from the atmosphere and lock it away in geological formations and by other methods. This differs from capturing it from point sources such as refinery and industrial smokestacks.
The council, led by a Canadian working group that includes such companies as Arca Climate Technologies Inc., Climeworks AG, Deep Sky Corp. and Planetary Technologies Inc., released a policy primer on Wednesday calling on Prime Minister Mark Carney’s government to implement a series of supportive policies.
As it stands, Canada is a “hotbed” of private CDR investments, with Shopify Inc., Royal Bank of Canada and other big players active in purchasing carbon removal credits. However, much of the financing is still early-stage, and more is needed to help the industry expand and create more jobs, said Ben Rubin, the Carbon Business Council’s executive director.
“We think for carbon removal to reach its fullest potential, having the right enabling policy environment can help unlock further private-sector investment,” Mr. Rubin said in an interview. “One theme that came out of the policy primer in the full spectrum of recommendations is there’s not a single silver bullet.”
The group urges the government to procure carbon removals alongside the private sector, consider regulatory mandates and design market mechanisms to provide long-term stability for project developers and investors.
It is asking for tax incentives and innovation funding to reduce supply costs and accelerate technology deployment. It is also calling for a policy framework that includes CO2 removal targets, reliable accounting standards and streamlined permitting.
“We’re thinking about the recommendations for multiple stages of companies, whether they might be at a startup phase or more mature phase, as well as the full spectrum of carbon-removal pathways. If we’re talking about permitting, that might be permitting for everything from direct-air capture to enhanced weathering to marine carbon,” Mr. Rubin said.
Mr. Carney has said his government will soon announce policies to boost Canadian competitiveness through reducing carbon in the economy. Last week, he mentioned strengthening clean-energy tax credits while maintaining the industrial carbon tax and improving how carbon markets work.
Carbon markets are an important tool and market-based solution for reducing emissions, said Jonathan Hackett, Bank of Montreal’s head of sustainable finance.
Mr. Hackett said the bank seeks to use products like structured finance to accelerate deployment of the technology. In addition, it is studying how to help translate demand for carbon credits into long-term revenue for the companies.
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Not all climate advocates are on board with CDR. Some criticize the technology as providing an excuse the fossil-fuel industry can use to avoid making the necessary reductions in emissions from oil, gas and coal combustion.
Sean Lowrie, head of external affairs for Vancouver-based Arca, called that a mischaracterization of one of the approaches the Intergovernmental Panel on Climate Change has identified as necessary to skirt the worst effects of climate change.
Mr. Lowrie noted that the IPCC has determined the world needs to remove massive quantities of carbon annually to stabilize the climate by 2050.
Arca has developed technology to capture CO2 using steel slag and other industrial waste to form new carbonate minerals. It also has a proprietary method of capturing and locking carbon away in rocks through mineralization.
It is one of several carbon-removal technologies being developed across the country. Last month, Montreal-based Deep Sky Corp. formally opened a direct-air capture test centre for several technologies in central Alberta.
Mr. Lowrie said the council is offering a promising opportunity for the economy.
“This is a brand new industry that needs to get to be the size of oil and gas by 2050, and Canada has all sorts of natural attributes that could make it a leader in this new industry, if not the leader,” Mr. Lowrie said.
“In the government’s response to the tariffs, it’s about creating jobs and creating economic resilience, and this is a brand new opportunity and I think it’s exciting.”