Canada’s cold isn’t a barrier to carbon removal; it can actually be our competitive edge.

While our northern environment poses challenges to many industries, it can be uniquely suited to a new generation of direct air capture (DAC) technologies designed to thrive in frigid conditions. The physics are straightforward: cold, dry air can make certain DAC approaches more efficient, using less energy and water than conventional warm-climate systems.

But this opportunity extends beyond climate metrics. Canada’s North sits at the intersection of three critical national priorities: Arctic sovereignty, economic development, and Indigenous self-determination. Cold-climate DAC connects directly to all three, offering a rare alignment of interests that deserves serious attention from industry and government alike.

By scaling this technology, Canada can play a leadership role in stewarding our northern landscapes—not just for climate action, but as part of our broader story of innovation, northern resilience, and sovereignty.

What does DAC look like in the Arctic?

While most DAC systems struggle in cold weather, some Canadian companies have inverted this challenge entirely.

TerraFixing, an Ottawa-based firm, has engineered its technology specifically for frigid conditions. The efficiency gains are substantial: they indicate their systems operate 2.5 to 4 times more efficiently in cold climates compared to traditional DAC plants in warm regions. In May 2024, TerraFixing signed a $10 million commercial agreement with TUGLIQ Énergie to deploy two capture units in northern Canada. The first demonstration-scale facility, capturing 1,000 tonnes per year, launches in Fermont, Québec, in 2025.

However, unlike the Prairies, which sit atop well-characterized geological storage formations, Northern Canada’s storage potential is still being studied. Early assessments suggest some suitable formations may exist, but more work is needed to confirm and map them. In the meantime, captured CO₂ could be transported via trucking or piping to existing storage sites farther south, which adds some cost and logistical complexity.

The path forward starts with building the knowledge base to better understand northern storage potential and developing the infrastructure to match. This means advancing geological research and verification alongside the pipelines for CO₂ transport and regional storage hubs outlined in Canada’s Carbon Management Strategy. It’s a significant undertaking, but entirely feasible given Canada’s recent ambitions to assert our Arctic presence. Closing this gap would enable the carbon removal sector while positioning Canada as a global leader in cold-climate technology and creating economic opportunities in remote regions.

The strategic value beyond carbon removal

Scaling cold-optimized DAC across northern Canada delivers compound benefits:

• Arctic sovereignty: Cold-climate DAC projects strengthen Canada’s physical presence in the North through lasting infrastructure in remote regions. This directly supports commitments in our Arctic and Northern Policy Framework to expand northern capacity. As global interest in Arctic routes and resources intensifies, establishing permanent DAC facilities, and the roads and that come with them, helps cement Canadian sovereignty in a region of growing geopolitical importance.
• Economic development: DAC facilities can generate substantial long-term employment in northern and rural communities, while diversifying local economies beyond resource extraction. Research from the Rhodium Group suggests that a single 500-kilotonne-per-year facility creates approximately 1215 average annual construction jobs over five years and 340 ongoing operations roles. At the one-megatonne scale, projects may support 1180–1830 construction jobs and 260–400 permanent positions. Early leadership also positions Canadian firms to export both removal credits and technology as global carbon markets mature.
• Energy transition acceleration: Roughly 70 percent of remote Canadian communities rely on expensive, imported diesel for heat and electricity. DAC’s steady baseload electricity demand strengthens the business case for new wind and solar projects across the North. This model has proven successful at an industrial scale; Raglan Mine’s Arctic wind installation has already displaced over 10 million litres of diesel. Expanded renewable capacity benefits local communities through lower energy costs, more reliable power, and reduced pollution and transport risks.

What needs to happen next

Canada has taken promising first steps: a $10 million federal commitment to procure carbon removal by 2030, a 60% DAC investment tax credit through 2030, and political commitments to expand support. Yet this momentum alone won’t be enough to build a globally competitive industry around Canada’s unique northern advantages.

Here’s what federal and provincial leaders could do now:

• Lock in long-term demand: The Government of Canada can build on lessons from the Low-Carbon Fuel Procurement Program‘s initial $10 million carbon removal purchase by establishing a permanent procurement program under the Department of National Defence. This approach would leverage already committed defense funds while simultaneously advancing NATO spending targets. Multi-year purchase commitments give developers the confidence to invest at scale.
• Center community leadership: Ensure cold-climate DAC development happens in genuine partnership with Indigenous and northern communities, with their decision-making shaping project direction from the outset. This means:
• Requiring developers to embed Indigenous partnership, community agency, and fair benefit agreements into project design.
• Federal and provincial funding for early engagement and independent technical advice.
• Supporting local workforce training programs.
• Enabling meaningful revenue-sharing mechanisms.
• Build enabling infrastructure: Accelerate CO₂ transport network development connecting northern capture sites to southern storage hubs. Establish clear, transparent access terms allowing multiple operators to share infrastructure, reducing individual project costs and risks. This creates the backbone for a scalable northern carbon removal industry.

A rare convergence of national interests

Canada stands at an uncommon intersection where climate action, economic prosperity, and national security align. Cold-climate DAC offers more than carbon removal. It can be a vehicle for cementing our Arctic presence, while also transitioning remote communities from diesel to clean energy, creating thousands of skilled jobs, and establishing Canada as the global leader in technology that the world will increasingly need.

With strategic procurement, enabling infrastructure, and strong Indigenous and community leadership, Canada can turn its northern climate advantage into lasting strategic value: greater prosperity, enhanced security, and leadership in the climate economy taking shape this decade.

By Jacob Ma, October 22, 2025