In recent years, the carbon dioxide removal (CDR) sector in Canada has surged, notably influenced by enhancements to CDR tax incentives in the US. This has raised concerns in Canada about lagging policies, prompting a push to align with global advancements. However, rather than merely closing this gap, Canada has the potential to lead globally in CDR by leveraging its unique strengths.
Canada, with a population comparable to California and the world’s second-largest landmass, is well-positioned to drive progress in CDR. It boasts a robust climate start-up ecosystem, supportive research and development (R&D) programs, advanced infrastructure, and significant natural resources. These assets can help Canada excel in three key areas: pioneering new CDR methods, influencing the global CDR market, and setting standards for efficient and equitable CDR deployment.
The need for leadership in CDR is urgent. According to the UN’s Intergovernmental Panel on Climate Change, ten billions of tons of CO2 must be removed annually by mid-century to meet climate targets. Currently, based on a report led by University of Oxford, about two billion tons of CO2 are being removed from the atmosphere every year. Key barriers to scaling CDR include insufficient R&D support, unstable revenue streams, and a lack of standardized practices.
Canada’s potential to lead in CDR stems from its specific strengths:
1) Thriving Start-Up Ecosystem: Canada has become an attractive hub for CDR and carbon technology start-ups. Notable companies include Carbon Engineering (direct air capture), CarbonCure (carbon mineralization in building materials), Planetary (Ocean based-CDR), and Shopify (a leading buyer in the CDR). The presence of successful firms and supportive accelerators like Foresight/carbonNEXT and MaRS Discovery District creates a nurturing environment for new ventures and accelerates commercialization.
2) Robust R&D Programs: Canada supports early-stage research through generous tax credits and funding initiatives. Programs such as the Scientific Research & Experimental Development (SR&ED) tax incentives and Sustainable Development Technologies Canada’s funding for clean technologies are crucial for advancing experimental CDR methods.
3) Infrastructure and Expertise: Canada’s geological formations and regulatory frameworks are conducive to CO2 storage. The Shell Quest CCS facility in Alberta and research projects like the Solid Carbon project in British Columbia exemplify Canada’s capabilities in CO2 infrastructure. Additionally, Canada’s workforce, skilled in industries such as oil and gas and mining, can drive the development and deployment of CDR technologies.
4) Natural Resources: Canada’s vast natural resources, including extensive forests and a lengthy coastline, offer ample opportunities for various CDR methods. The country’s natural biomass, large land areas, and significant mineral deposits are well-suited for scalable CDR projects. Ensuring responsible stewardship and collaboration with Indigenous communities is crucial for equitable project implementation.
To harness these strengths, Canada must clearly distinguish CDR from traditional carbon capture technologies like CCS/CCUS in its policies and strategies. As global discussions unfold, particularly during events like COP29, Canada’s potential to lead in CDR represents a critical opportunity for impactful climate action.
In summary, Canada stands at the cusp of becoming a global leader in carbon removal by leveraging its start-up ecosystem, R&D capabilities, infrastructure, and natural resources. By addressing current barriers and developing a clear, inclusive strategy, Canada can make significant strides in the global fight against climate change.
Photo by Nextvoyage
