The world’s largest carbon-capture project is at risk of never being built because of uncertainty about Canadian government incentives, according to Wood Mackenzie Ltd.
The $12 billion (C$16.3 billion) first phase of Pathways Alliance’s massive development to store emissions underground “will be delayed and potentially scuppered” if Canada’s federal and provincial governments don’t figure out how to underwrite some of the financial risks involved, Peter Findlay, a Wood Mackenzie analyst, wrote in a report released Wednesday.
Pathways, the consortium of major oil-sands companies behind the proposed development, has been warning since last year that it needs firm commitments of government support so it can take preliminary steps to commence the project.
Without secure support, deadlines for slashing emissions could be missed, the group has said.
“The real challenge for Canadian CCUS then is not insufficient incentives — they are some of the most attractive in the world— but the uncertainty of their existence throughout project life,” Findlay wrote. “The value of most of these incentives could be changed by political whim at any point during the project life — even going to zero.”
The Pathways development would capture and store carbon dioxide, slashing an estimated 22 million metric tons of emissions by 2030.
“The projects showing early success globally are using a collaborative model where governments are co-investing alongside industry,” Pathways President Kendall Dilling said in an email.
“For Canada to be a world leader in reducing emissions through carbon capture, we need to ensure our industry remains competitive with other energy producing jurisdictions around the world.”
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