IM-Brunnen_2023_0908.pub

The central lever is an investment tax credit of 50 percent for capture and 37.5 percent for transport and storage, and the prospect of contracts for difference to provide certainty on future revenues. [...] According to the Alberta Law Review: “Canada has yet to realize a national, integrated market for carbon emission reduction products, and one with the fungibility and transparency that would facilitate acceleration toward achievement of net-zero goals.” Canada is thus proposing a “contracts for difference” approach to guarantee a floor price. [...] The CCUS credit market could likely also be comprised of a few major facilities or companies that on the one hand incur the emissions cost, while on the other receive the carbon revenues – a zero sum proposition. [...] While the US has overcome this through the 45Q credit funded by the tax base, the upside is additional investment. [...] • In addition to the tax credits, adopt a government funded credit approach that creates an equivalent benefit to the US 45Q.