Carbon Engineering CEO Daniel Friedmann, right, talks with Toby Stedham, vice president of operations, at the company's direct air capture pilot plant, in Squamish, B.C., on Jan. 26.DARRYL DYCK/The Globe and Mail
Emerging technologies to pull carbon dioxide out of the atmosphere are a potential economic boon for Western provinces, and a necessity for Canada to achieve its commitment to net-zero emissions by mid-century, contends a new group pushing Ottawa to put its weight behind the nascent industry.
Carbon Removal Canada (CRC), an organization being kick-started by the climate charity Clean Prosperity Foundation, will officially launch on Wednesday. It is releasing a report highlighting a range of competitive advantages – including work force expertise, geological storage capacity and about 70 early-stage companies – that could allow Canada to be a leader in the space.
Based on analysis commissioned from the climate-modelling consultancy Navius Research Inc., it asserts that the industry could create more than 300,000 Canadian jobs and $143-billion in GDP by 2050.
But the report, provided in advance to The Globe and Mail, also suggests that an extraordinarily quick scaleup would be required to meet that potential.
And it acknowledges the need for government intervention to overcome obstacles to carbon removal, which is distinct from limiting emissions by capturing carbon at polluting industrial sites (an approach Canada is already more aggressively pursuing).
Among those barriers are a cost per tonne of removed carbon that is currently too high to be economical absent government subsidies, and a lack of existing systems to verify that projects meet their promises. The latter is especially important if removal projects are to generate credits traded on carbon markets, which is their likeliest revenue source.
To date, Canada has been less ambitious than the United States in advancing related strategies. While Ottawa plans to offer support through a promised investment tax credit for both carbon capture and carbon removal, it won’t be at the same level as available U.S. tax credits. And Washington has put billions of dollars on the table for more direct backing, such as for demonstration projects.
The greater U.S. focus is thought to have contributed to British Columbia’s Carbon Engineering Ltd., an early leader in the carbon-removal technique known as direct air capture, launching its first project in Texas and being bought this year by the U.S.-based Occidental Petroleum Corp.
However, the CRC report describes an industry still barely in its infancy, with massive room and need for growth.
Carbon Removal Canada executive director Na’im Merchant cited international research suggesting that carbon removal will need to expand by a factor of between 1,300 and 4,900 from current levels to help keep planetary warming to within 1.5 degrees or even 2 degrees Celsius above preindustrial levels.
That’s partly to counterbalance industrial emissions that remain in sectors where it’s not possible to fully eliminate them. It’s also to reverse some of the emissions already accumulated.
In Canada, the report says, modelling by other organizations has suggested the need for between 91 and 266 megatonnes of carbon removal annually to achieve net-zero emissions by 2050. It also says hundreds of additional megatonnes will be required for Canada to do its part addressing residual emissions, since this country has contributed about 3 per cent of the postindustrial total.
In meeting those needs, Mr. Merchant said, there is opportunity to go beyond direct air capture, which uses chemical reactions to pull carbon out of the air, and has thus far dominated the industry’s attention.
He pointed to carbon-removal methods involving plant biomass, mineralization and the use of ocean surfaces and seawater as examples where Canada’s geographic features could help it take a lead, and where Canadian companies are already developing technologies.
The new organization’s effort to engage policy makers is getting some early backing from outside Canada. In an interview, Julio Friedmann – a scientist and former senior official in the U.S. Department of Energy who is among the most prominent international carbon-removal advocates – echoed the competitive advantages listed in the report.
“Canada absolutely can be in the top tier of nations doing this,” Dr. Friedmann said.
He also suggested that the sooner Canada moves, the better its chances of helping shape international systems and rules around the new industry. That’s a relevant consideration both for competitiveness, and because of concerns among environmentalists that lax standards could allow fossil fuel companies and other heavy emitters to greenwash.
As for government supports to establish a leadership role, Carbon Removal Canada says that additional tax credits may be needed to close the gap with the U.S.
It’s also calling for policies, such as guaranteeing the value of credits generated under Canada’s industrial carbon-pricing system, and direct government procurement of some made-in-Canada carbon-removal options for proof of concept. Other aspects of its proposed strategy would include developing carbon-removal protocols, streamlining permitting and encouraging Indigenous partnerships.
The new organization, which is funded by a group of foundations and charities, could face an uphill battle on the financial pitches in particular. After making climate-related investment a focus of this year’s budget, Ottawa has signalled reluctance to commit to further such spending.
Nevertheless, a subtext of the report is that a carbon-removal push could be less contentious than other federal climate policies, given the potential to heavily benefit parts of the country where suspicion of that agenda runs highest.
Clean Prosperity executive director Michael Bernstein, who co-founded Carbon Removal Canada and is chairing its advisory board, optimistically hinted at that prospect in an interview when he noted that Alberta and Saskatchewan, as well as B.C., could be big beneficiaries.
“We’re seeing significant interest in carbon-dioxide removal across the political spectrum,” he said.