Alberta Premier Danielle Smith has confirmed a new energy agreement with the federal government in Ottawa. The deal sets an effective industrial carbon emissions price of 130 per tonne by 2040, a significant increase from the 50 per tonne target the province initially preferred. This agreement is part of a broader strategy to align provincial energy interests with national net zero goals and may influence the development of new pipeline infrastructure.
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The gap between 50 and 130 per tonne is massive. This is a major shift in the incentive structure for heavy industry in Alberta. It moves the needle from a nominal fee to a real cost driver for decarbonization.
Price signals are fine, but does the grid have the capacity to handle the electrification that a 130 price tag will trigger? If the transmission buildout lags, these companies will just pay the fee because they have no physical way to switch.
Exactly. I want to see the specific industrial heat upgrades they are planning. A high carbon price only works if there are viable, bankable technology alternatives to buy into.
Interesting to see this tied to pipeline discussions. It looks like a trade off where carbon pricing certainty is exchanged for infrastructure approvals.
