The IRA has been widely praised for kick-starting the global clean energy investment race. But here in Canada, some companies have said the U.S. incentives are so attractive that it’s impossible to compete.
While Prime Minister Justin Trudeau’s government has already announced the creation of an investment tax credit for carbon capture projects, the IRA offers a much stronger incentive for companies in the form of a guaranteed US$85 price for each tonne of injected carbon. “A production tax credit, like the IRA offers, actually incentivizes the production of negative carbon,” Belenkie said. “It means you have to be good at actually capturing the carbon and accomplishing your goal.”
“We have a lot more on the pollution pricing and regulatory side here,” Woynillowicz said, adding he believes a combination of carrots and sticks is the best approach when it comes to reaching Canada’s climate goals.Article content Freeland has indicated more incentives are on the way, saying there is a “historic window” right now to invest in what will be the industrial economy of the 21st century.
That would ease industry and investor fears that a future federal government could freeze or cancel the carbon price, making investments in things like carbon capture and storage less risky, said Jan Gorski, oil and gas director with the Pembina Institute, a clean energy think-tank.