Canada will next year introduce a new investment tax credit for capital invested in carbon capture, utilisation and storage (CCUS) projects, including blue hydrogen projects and direct air capture projects.
The country’s Department of Finance on Monday (7th June) said it is launching consultations with stakeholders on the recent federal budget’s proposal to introduce the credit.
When launched, the Federal Government intends for the new investment tax credit to be available for a broad range of CCUS applications across different industrial subsectors, but not enhanced oil recovery projects.
To support this, the Government is seeking input from all industrial subsectors, recognising that various subsectors face different challenges in adopting CCUS. The consultation will include key provincial governments, as part of efforts to encourage complementary measures for CCUS projects in their respective jurisdictions.
It is believed that the CCUS investment tax credit will be available starting in 2022. On the same timeline, the government will also determine how comparable tax support could be provided to producers of green hydrogen.