The federal government confirmed the inclusion of enhanced oil recovery in the tax credit for carbon capture. This decision marks a significant shift from earlier promises not to include it.
This tax credit will provide 30% for direct air capture equipment, 25% for other capture equipment, and 18.75% for transportation, storage, and utilization equipment. The measure is projected to increase federal revenues by $395 million over four years starting in 2027-2028.
The announcement follows a protocol signed with Alberta in November. This protocol initially excluded enhanced oil recovery from the 2025 federal budget.
The Business Council of Alberta supports this measure. They argue it is essential for attracting foreign investment in the energy sector.
However, not everyone agrees. Elizabeth May criticized the government’s claims about revenue generation, calling them misleading. She argues that the environmental impact of enhanced oil recovery remains a concern.
François-Philippe Champagne stated that this measure could help store more carbon. Still, environmentalists are wary of potential negative consequences.
As of midday, reactions continue to pour in from various stakeholders. Observers are keenly watching how this decision will unfold politically and economically.