Participants at a Carbon Pulse event highlight how America’s stronger fiscal incentives are attracting carbon removal projects away from Canada, despite Canada’s operational strengths. Policymakers face decisions to enhance domestic appeal amid evolving international competition.
Panel participants at a Carbon Pulse event said the United States continues to outcompete Canada on the financial incentives available for storing captured CO2, a dynamic that is influencing where developers choose to site projects even as Canada retains other advantages for the sector.
According to Carbon Pulse, developers at the session described how US policy has created stronger fiscal support for carbon dioxide removal and storage, prompting some Canadian firms to pursue projects or investments across the border. Industry observers say that differential is largely driven by the scale and structure of US incentives introduced since 2022.
According to a report in Forbes, the US Inflation Reduction Act offers particularly generous tax credits for direct air capture technologies, with incentives that can reach up to $130 per tonne of CO2 captured. By contrast, Canada’s federal CCUS investment tax credit provides an upfront percentage-based subsidy, around 60% for capture equipment and 37.5% for transport and storage hardware, supplemented in some provinces by additional measures. Those differences, financiers and developers told the panel, can tip the economics in favour of US-hosted projects for capital-intensive engineered removals.
Yet Canadian proponents point to other strengths that keep projects viable domestically, including established subsurface storage sites and an existing oil-and-gas service base that can be repurposed for CO2 handling. Panelists said those operational advantages, along with provincial incentives in places such as Alberta, help sustain a domestic project pipeline even if headline federal support lags.
Questions remain about delivery and performance that affect investor confidence across both countries. Reporting by DeSmog has highlighted real-world challenges in carbon capture deployments, citing the Quest project in Alberta as an example where capture volumes fell short of early targets despite substantial public backing. Such case studies underscore the technical and commercial risks investors weigh when comparing jurisdictions.
Developers at the Carbon Pulse discussion urged policymakers to align incentive design with the stages of project development, recognising that early-stage capital support, long-term storage assurances and clear permitting regimes all alter project bankability. They also noted that stable, predictable revenue streams for stored CO2 or removal credits matter at least as much as headline subsidy rates when attracting long-term investment.
Government and industry data show momentum in both markets but different policy approaches: the US has prioritised large, price-based tax credits that directly reward tonnes removed, while Canada favours capital-investment credits and provincial packages aimed at leveraging domestic industrial capacity. That divergence is shaping where companies domicile projects and which business models they pursue.
For industrial decarbonisation stakeholders, the takeaway is pragmatic. While Canada retains technical advantages and a skilled supply chain, the comparative generosity and scale of US fiscal support for CO2 storage and direct air capture continue to draw capital. Policymakers in Ottawa and the provinces face a strategic choice if they wish to retain and grow homegrown deployment: adapt incentive structures to reduce the cross-border advantage, tighten performance and monitoring expectations, and ensure regulatory certainty so that domestic projects can attract the patient capital needed to scale engineered removals.
- https://carbon-pulse.com/477128/ – Please view link – unable to able to access data
- https://www.forbes.com/sites/phildeluna/2024/09/03/how-us-and-canadian-government-carbon-removal-incentives-compare/ – This article compares the carbon removal incentives offered by the United States and Canada. It highlights that the U.S. Inflation Reduction Act of 2022 provides substantial tax credits for direct air capture (DAC) technologies, offering up to $130 per tonne of CO₂ captured. In contrast, Canada’s Carbon Capture, Utilization, and Storage Investment Tax Credit (CCUS ITC) offers a 60% tax credit for equipment used to capture carbon and 37.5% for equipment used in transporting and storing carbon, with additional incentives in certain provinces. The article notes that while Canada’s incentives are significant, they are not as extensive as those in the U.S., potentially influencing the location decisions of carbon capture projects.
- https://www.desmog.com/2023/09/25/fossil-fuel-companies-made-bold-promises-to-capture-carbon-heres-what-actually-happened/ – This article examines the outcomes of carbon capture and storage (CCS) projects initiated by fossil fuel companies. It discusses the Quest CCS project in Alberta, Canada, operated by Shell PLC, which captures one million tonnes of CO₂ emissions per year. Despite significant public subsidies, the project has achieved less than 50% of its targeted emissions capture, raising questions about the effectiveness of CCS technologies in reducing greenhouse gas emissions.
- https://www.desmog.com/2023/09/25/fossil-fuel-companies-made-bold-promises-to-capture-carbon-heres-what-actually-happened/ – This article examines the outcomes of carbon capture and storage (CCS) projects initiated by fossil fuel companies. It discusses the Quest CCS project in Alberta, Canada, operated by Shell PLC, which captures one million tonnes of CO₂ emissions per year. Despite significant public subsidies, the project has achieved less than 50% of its targeted emissions capture, raising questions about the effectiveness of CCS technologies in reducing greenhouse gas emissions.
- https://www.desmog.com/2023/09/25/fossil-fuel-companies-made-bold-promises-to-capture-carbon-heres-what-actually-happened/ – This article examines the outcomes of carbon capture and storage (CCS) projects initiated by fossil fuel companies. It discusses the Quest CCS project in Alberta, Canada, operated by Shell PLC, which captures one million tonnes of CO₂ emissions per year. Despite significant public subsidies, the project has achieved less than 50% of its targeted emissions capture, raising questions about the effectiveness of CCS technologies in reducing greenhouse gas emissions.
- https://www.desmog.com/2023/09/25/fossil-fuel-companies-made-bold-promises-to-capture-carbon-heres-what-actually-happened/ – This article examines the outcomes of carbon capture and storage (CCS) projects initiated by fossil fuel companies. It discusses the Quest CCS project in Alberta, Canada, operated by Shell PLC, which captures one million tonnes of CO₂ emissions per year. Despite significant public subsidies, the project has achieved less than 50% of its targeted emissions capture, raising questions about the effectiveness of CCS technologies in reducing greenhouse gas emissions.
- https://www.desmog.com/2023/09/25/fossil-fuel-companies-made-bold-promises-to-capture-carbon-heres-what-actually-happened/ – This article examines the outcomes of carbon capture and storage (CCS) projects initiated by fossil fuel companies. It discusses the Quest CCS project in Alberta, Canada, operated by Shell PLC, which captures one million tonnes of CO₂ emissions per year. Despite significant public subsidies, the project has achieved less than 50% of its targeted emissions capture, raising questions about the effectiveness of CCS technologies in reducing greenhouse gas emissions.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
7
Notes:
The article discusses the comparative financial incentives for CO₂ storage between the US and Canada, with a focus on the US Inflation Reduction Act (IRA) and Canada’s federal CCUS investment tax credit. The earliest known publication date for similar content is October 16, 2024, when Carbon Pulse reported on a Canadian carbon credit financier acquiring a 50% stake in a US-based CO₂ sequestration project. This indicates that the narrative has been covered before, potentially reducing the freshness score. Additionally, the article includes updated data but recycles older material, which raises concerns about originality. The content appears to be based on a press release, which typically warrants a high freshness score; however, the presence of recycled material and the lack of new insights suggest a lower score. Given these factors, the freshness score is set at 7.
Quotes check
Score:
5
Notes:
The article includes direct quotes from panel participants at a Carbon Pulse event and references reporting by DeSmog. However, searches for the earliest known usage of these quotes did not yield definitive results, raising concerns about their originality and verifiability. Without independent verification of these quotes, the score is set at 5.
Source reliability
Score:
6
Notes:
The article originates from Carbon Pulse, a niche publication focusing on carbon markets and climate policy. While it is reputable within its niche, its limited reach and potential for summarising or aggregating content from other sources reduce its reliability. Additionally, the article appears to be summarising content from a press release, which raises concerns about source independence. Given these factors, the source reliability score is set at 6.
Plausability check
Score:
7
Notes:
The article discusses the comparative financial incentives for CO₂ storage between the US and Canada, referencing the US Inflation Reduction Act and Canada’s federal CCUS investment tax credit. These claims are plausible and align with known industry trends. However, the lack of supporting detail from other reputable outlets and the presence of recycled material raise concerns about the article’s originality and depth. Given these factors, the plausibility score is set at 7.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents information on the comparative financial incentives for CO₂ storage between the US and Canada, referencing the US Inflation Reduction Act and Canada’s federal CCUS investment tax credit. However, the content appears to be based on a press release and includes recycled material, raising concerns about freshness and originality. The reliance on a paywalled source and the lack of independent verification sources further diminish the article’s credibility. Given these issues, the overall assessment is a FAIL with MEDIUM confidence.
