Canadian oil producers MEG Energy and Cenovus say the government’s $2.6 billion plan to assist carbon capture and storage is not ample

Canadian tar sands producers are calling for larger sized subsidies to aid them decarbonise their functions even though reporting document profits pursuing Russia’s invasion of Ukraine.

In its yearly budget, Justin Trudeau’s federal government proposed to subsidise the advancement of projects to seize carbon dioxide from oil and fuel output or combustion and forever shop it underground or in concrete for illustration.

Underneath the approach, oil and gasoline companies would be eligible for a 50% tax credit right up until 2030 for investing in carbon capture, utilisation and storage (CCUS) assignments. This envisioned to charge the federal governing administration $2.6 billion in the first five decades — reaching up to $8.6 billion by 2030.

But corporations producing some of the world’s dirtiest oil say it is not adequate to influence producers to acquire significant-scale CCUS.

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On Monday, Canadian tar sands producer MEG Energy Corporation posted history results in the very first quarter of the 12 months, with net earnings more than double that of the very same time period in 2021.

The future day, CEO Derek Evans advised analysts that the Alberta govt must top rated up the CCUS tax credit rating to include 75% of the expenses, leaving oil firms accountable for just 25% of the investments, the Economical Publish reports.

Final week, Alex Pourbaix, CEO of tar sand business Cenovus Electricity, explained providers will need to have “more help” from the two the federal federal government and the Alberta authorities to go forward with substantial-scale carbon capture and storage assignments.

The same working day, the organization declared a sevenfold increase in its quarterly income and a tripling of its dividends. Oil and gasoline organizations are benefitting from soaring world-wide energy charges as western customers scramble to exchange Russian provides and defund the Kremlin’s war device.

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The industry’s stance has prompted outrage from Canadian environmentalists.

“Carbon capture is not a weather option – it’s a greenwashing technique utilised to justify far more fossil fuel generation,” Julia Levin, from the Environmental Defence Canada, advised Weather Dwelling.

“Oil and gas firms know these are dead-close technologies which won’t make a dent in emissions, but are utilizing them anyway to delay the clean up vitality transition and get additional taxpayer income into the pockets of executives and shareholders.”

Equally MEG Vitality and Cenovus are associates of the Oil Sands Pathway Alliance, a group of six oil firms liable for about 95% of Canada’s oil sands generation dedicated to achieve internet zero operational emissions by 2050. The target does not go over emissions from prospects burning the oil.

The alliance has proposed to operate on a CCUS task that it says could lessen CO2 emissions by 10 million tonnes per 12 months by 2030 – the equal of emissions from much more than two million combustion-motor autos pushed for a calendar year.

But that will call for governments’ “co-investing alongside the field,” it said in a assertion welcoming the government’s tax credit rating proposal final thirty day period.

“Tar sands providers are swimming in dollars, still are only prepared to lower pollution if the taxpayer foots the monthly bill,” Keith Stewart, senior power strategist with Greenpeace Canada, told Local weather House.

“Rather than throwing away public funds on carbon seize subsidies for fossil fuels, Canadian governments must be heading all in on renewable energy and the electrification of transportation, heating and cooling.”

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Canada is 1 of five main oil producers to have signed up to the Internet Zero Producers Discussion board, which fully commited to use approaches these kinds of as CCS to reduce emissions from oil manufacturing. Leaving oil in the ground is not one of them.

In reality, most of the captured carbon dioxide in Canada is utilised to extract more oil from depleted wells in a system recognised as enhanced oil recovery. This is not eligible for the Ottawa’s proposed tax credits.

A report by Environmental Defence Canada posted in March estimates that, considering the fact that 2000, subsidies for oil and gas organizations to produce CCS amounted to $5.8bn: $2bn from the federal govt and $2.6bn and $1.2bn from the oil creating provinces of Alberta and Saskatchewan respectively.

This resulted in a annually seize charge of considerably less than four million tonnes of CO2 – about .05% of Canada’s emissions, the report discovered.

Most of the proposed CCUS tasks in Canada worry the manufacturing phase and wouldn’t assist to cut down emissions from burning of the oil, which accounts for 80% of the emissions.

“There could be a function for carbon capture from difficult-to-abate industrial apps, but not for standard fossil fuels like the tar sands in which it can at greatest tackle only a very small part of the pollution,” claimed Stewart.

Chloé Farand

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