Canada regains terrain to position the country as a clean tech and hydrogen front runner
The November 2022 COP27 climate summit seems old news as we enter the end of January 2023. This is primarily because this year’s climate summit, which was hosted by Egypt, did not produce any breakthrough. As previously anticipated the Climate Summit was more about procedural agreements than strategic decisions. However, the Climate summit was a success for Canada as the country brought to Egypt numerous members of both the Canadian public and private sectors with more robust decarbonization commitments. Among the private corporate leaders coming to Egypt we count several representatives from the Royal Bank of Canada, pipeline giant Enbridge Inc., oil majors Cenovus Energy Inc. and Imperial Oil Ltd. Other attendees included representatives from Suncor Energy Inc.
Among these Canadian private sector participants, Pathways Alliance, one of Canada’s largest oil sands producers showcased the sector’s plan to slash emissions through a $16.5-billion carbon-capture and storage network in northern Alberta. Other Canadian oil and gas producers rushed to Egypt to align their narrative and adjust their operations plans to the stricter decarbonization metrics, and the changing business landscape based on sustainability. While these commitments are promising and starting to show up in Canadian energy companies annual reports and websites, it is less clear how these decarbonization commitments will convert to new investments. On the public sector side, national and regional governments will have to deal with decarbonization choices without creating too much pain for the hydrocarbon industry, which contributed over $50 billion in taxes and royalties in 2022.
Part of the answer, say the Pathways Alliance and other heavy-emitting sectors of Canada’s economy, is making large investments in carbon-capture and storage projects and other clean technologies. This will happen with direct or indirect support from governments in the form of loans, tax credits and grants. These subsidies and tax credits are essential government interventions given the significant delay of Canada regulating the energy its markets. While these subsidies may be tough to swallow for the average Canadian, they may be needed to ensure Canada meets its decarbonization targets by 2030, innovate, and…