Canada’s carbon dioxide removal industry needs more to achieve its $143B potential by 2050

The 2023 Fall Economic Statement represents a potential step forward for Canadian carbon dioxide removal, but major policy gaps remain

TORONTO, ONT., November 22, 2023

Carbon Removal Canada’s Executive Director, Na’im Merchant, made the following statement about the release of the federal government’s 2023 Fall Economic Statement:

“The government has taken a number of important steps towards Canada’s clean economic transition with the 2023 Fall Economic Statement, but more must be done – and rapidly – to ensure that carbon dioxide removal (CDR) technologies can achieve their full potential. Canada’s path to net zero gets narrower every day without immediate additional funding and policies that allow the CDR sector to scale to 5 megatonnes of removal capacity by 2030, and over 300 megatonnes by 2050. It is critical we achieve this scale, not only to achieve our environmental goals but also our economic ambitions. If we are able to achieve 300 megatonnes by 2050 we could create 89,000 jobs and unlock an additional $143B in GDP.”

“We welcome the federal government’s announcement that they will expand the eligibility for a number of investment tax credits to include biomass for heat and electricity. However, only using biomass for electricity generation and heat production limits its environmental potential. We must ensure the focus is on maximizing the carbon removal and storage potential of biomass-based pathways, including biochar which can provide durable carbon storage and improve soil health if applied to agricultural lands.”

“Additional details on the Canada Growth Fund and carbon contracts for difference will be important to the CDR sector as offtake agreements could help create the demand signal that Carbon Removal Canada has been calling for. If the Canada Growth Fund can enter into purchase agreements with a variety of Canadian CDR companies, this could fill a short-term demand gap while more permanent programs are developed, and help drive investor confidence and put shovels in the ground with confidence.”

“The Government of Canada must create a carbon removal procurement program and provide additional financial support for research, development, demonstration, and deployment. It should also work with stakeholders to streamline the regulatory process to make sure Canada remains a competitive business environment.”

Carbon Removal Canada is an independent policy initiative founded to shape policies that will enable Canada to rapidly and responsibly scale CDR to meet national climate goals.  “Ready for Removal: A Decisive Decade for Canadian Leadership in Carbon Dioxide Removal” is the initiative’s first research report that details how Canada can be a global leader in the fight for this critical net-zero sector.

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