The question of who should bear the financial risk for pricey carbon capture and storage projects has become a stumbling block slowing the technology's adoption in Canada.Edmonton-based Capital Power cancelled plans for a proposed carbon capture project at its Genesee power plant, saying while the project is technically viable, the economics don't work.
But six months after the Entropy agreement, not a single other company has successfully negotiated a similar deal. And the bulk of carbon capture projects proposed for Canada still only exist on paper, with final investment decisions yet to be made. "For carbon capture and storage to work, there has to be a relentless focus on picking the best projects," Belenkie said.
The federal government, through the $15-billion Canada Growth Fund, has committed to reaching such agreements with emitters who deploy CCUS — essentially guaranteeing that if the price of carbon falls below a certain level in the future, the fund will pay the difference.Entropy's successful carbon offtake agreement saw the Canada Growth Fund agree to purchase up to 185,000 tonnes of carbon credits from Entropy for a 15-year term at an initial strike price of $86.50 per tonne.
"It means they could face disagreements with companies, as I believe they did with Capital Power around what the appropriate price was for that project."