Canadian Scientists Challenge Carbon Capture Credits Policy
Why hundreds of Canadian experts warn that carbon capture credits risk propping up fossil fuels and undermining climate efforts.
In the growing debate over Canada’s climate strategy, hundreds of scientists and academics are urging the federal government to reconsider investment tax credits for carbon capture, utilization, and storage (CCUS). Their position has sparked a nationwide conversation about the risks of further fossil fuel subsidies, the effectiveness of carbon capture, and the direction of Canada’s climate policy.
Background: What Are Carbon Capture Credits?
Carbon capture, utilization, and storage (CCUS) refers to technologies that trap carbon dioxide emissions from industrial sources or directly from the atmosphere, then store them underground or repurpose for industry. To promote adoption, the federal government has proposed investment tax credits for CCUS projects, incentivizing development in sectors such as oil, gas, and cement.
Key Points on CCUS Tax Credits:
- Intended to stimulate carbon reduction innovation.
- Backed by oil companies, governments, and certain think tanks.
- Critics say credits risk becoming new fossil fuel subsidies.
Scientists’ Opposition: The Open Letter
On January 19, 2022, more than 400 Canadian academics and energy experts signed an open letter to Deputy Prime Minister Chrystia Freeland and other cabinet ministers, warning that CCUS tax credits represent a substantial new fossil fuel subsidy and undermine Canada’s net-zero commitments.
Main Arguments Against CCUS Tax Credits:
- CCUS tax credits contradict government promises to end fossil fuel subsidies by 2023 and breach international climate commitments such as the Paris Agreement.
- Effective solutions for deep emissions reductions, such as renewable energy and electrification, are already available and proven.
- Direct government funding for CCUS diverts resources from cleaner, cheaper alternatives.
A Track Record Under Scrutiny
The letter cited several failings of large-scale CCUS projects, both in Canada and globally. For instance, the flagship Boundary Dam 3 project in Saskatchewan aimed to capture 90% of emissions but never met that goal. Operators later reduced expectations to 65%, though the facility often fails to consistently reach even this lower benchmark.
| Project | Promised Capture Rate | Actual Performance |
|---|---|---|
| Boundary Dam 3 (Canada) | 90% | Usually below 65% |
| Global CCUS capacity (2022) | N/A | 39 MT CO2 annually (<0.1% of fossil fuel emissions) |
Globally, to impact Paris targets, gigatonnes of CO2 must be captured annually, far exceeding current abilities. Approximately 80% of CCUS projects in the United States have failed, pointing to technological and economic challenges for wide-scale deployment.
The Cost of Carbon Capture vs. Renewables
CCUS remains prohibitively expensive.
- CCUS requires significant capital investment.
- Costs of renewable energy have dropped dramatically, making them cheaper than fossil fuels in most cases.
The economic argument suggests government funds would be better spent advancing renewable energy, energy efficiency, and electrification, which are more scalable and cost-effective.
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Larger Industry Implications
Oil Industry Lobbying and Government Incentives
Oil companies and provincial governments have pushed for CCUS tax incentives for mega-projects such as Alberta’s 400-kilometre pipeline connecting oilsands operations with a planned underground storage hub. The Pathways Alliance—a group including major oil firms like Suncor, Imperial Oil, ConocoPhillips, Canadian Natural Resources, Cenovus, and MEG Energy—has lobbied Ottawa for billions in support.
Critics argue these projects amount to government handouts for further oil extraction and pipeline expansion, rather than genuine climate action.
“Decarbonized Oil”: A Scientific Critique
- Oil consists mostly of hydrocarbons—carbon bonded with hydrogen.
- “Decarbonizing” oil, chemically, is not possible without destroying the substance itself.
- This term is seen as a misleading form of greenwashing used by industry lobbyists to justify ongoing expansion.
Indigenous, Environmental, and Social Concerns
Environmental organizations and Indigenous groups have expressed frustration at the lack of thorough consent processes and proper government review of claims made by oil and gas corporations. Critics warn that these projects risk major pollution, legal challenges, and inequity in burden distribution.
- Indigenous nations have had limited avenues for meaningful participation or opposing projects, often being forced into costly legal battles.
- Environmental justice concerns center on the transfer of risk and costs to local communities.
Counterarguments: The Case For Carbon Capture Credits
Proponents of CCUS tax credits argue that, with appropriate incentives, these technologies can create jobs, stimulate economic growth, and help Canada meet its carbon reduction goals, especially in sectors where emissions are hard to eliminate.
- Technologies for trapping and storing CO2 are “proven and viable,” with safe subterranean storage since the 1970s.
- Rejecting CCUS risks leaving high-emitting industries with few options and could increase overall emissions long-term.
- Diverse stakeholders—companies, not-for-profits, unions, Indigenous groups—have expressed support for the tax credit.
Discussion: Subsidy Concerns & Climate Targets
Academic critics maintain that investment tax credits for CCUS may lock in new fossil fuel subsidies that are difficult to repeal. The risk is that these incentives will encourage further extraction rather than accelerate the energy transition, making it harder for Canada to achieve both its 2030 emissions targets and the broader net-zero goals needed to mitigate climate change.
Canada’s Emissions Outlook
- Current policy trajectory risks missing 2030 targets by a significant margin.
- Reliance on CCUS for short-term emissions reductions is viewed as scientifically risky.
Table: Policy Pathways and Implications
| Policy Approach | Advantages | Risks/Concerns |
|---|---|---|
| CCUS Tax Credits | Supports technology development, jobs in traditional sectors | Potential fossil fuel subsidy, questionable climate impact |
| Renewable Energy Investment | Proven rapid emissions reduction, scalable, affordable | Requires infrastructure overhaul, transitional costs |
Frequently Asked Questions (FAQs)
Q: What are CCUS tax credits supposed to achieve?
A: They aim to encourage investment in carbon capture technologies by making them more financially viable, with the goal of reducing greenhouse gas emissions from industries, especially oil, gas, and cement.
Q: Why do scientists oppose CCUS tax credits?
A: Critics say the credits subsidize fossil fuel production, undermine Canada’s climate commitments, and divert funds away from proven solutions like renewable energy and energy efficiency.
Q: Is carbon capture technology effective?
A: Most large-scale CCUS projects have failed to meet their promised emissions reduction rates. Current global capacity captures far less than the amount needed to meet Paris Agreement goals.
Q: Will CCUS allow for “decarbonized” oil production?
A: The concept is misleading: oil’s molecular structure is based on carbon, so “decarbonized oil” is not scientifically feasible. This is viewed as an industry marketing tactic rather than scientific reality.
Q: Are there alternatives to CCUS?
A: Yes. Academic signatories emphasize renewables, electrification, and energy efficiency as effective, scalable, and affordable pathways to deep emission cuts.
A Crossroads for Canadian Climate Policy
The controversy over CCUS tax credits highlights a central tension in Canadian climate policy: whether to support incremental and potentially uncertain technological fixes within the fossil fuel sector, or to fully commit resources to rapid and proven clean energy transformation. The stakes are high—not just for emission targets and economic strategy, but for global credibility and leadership in climate action.
- Scientists stress the urgency of redirecting climate investments toward renewables and efficiency.
- Industry leaders and policymakers push for pragmatic solutions for hard-to-abate sectors.
- Indigenous and environmental advocates demand inclusive processes and robust science-based decision making.
With investment decisions pending and climate targets looming, the national dialogue around CCUS credits offers a window into the complex political, scientific, and ethical dimensions of Canada’s net-zero transition.
References
- https://pipelineonline.ca/heres-the-entire-letter-signed-by-400-academics-in-opposition-to-carbon-capture-utilization-and-storage/
- https://thepointer.com/article/2025-09-20/carney-backs-reckless-lng-project-unproven-carbon-capture-being-spun-as-clean-oil
- https://cleanprosperity.ca/rejecting-carbon-capture-risks-increasing-emissions-heres-why/
- https://carbonherald.com/canadian-scientists-plead-rejection-of-the-carbon-capture-tax-credit/
- https://www.desmog.com/2025/09/23/gamechanger-study-warns-carbon-capture-may-fall-short-of-expectations-citing-storage-location-dangers/
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