The federal government and Alberta are close to finalizing a new industrial carbon pricing agreement. The proposed deal sets a price of $130 per tonne by 2040, a significant shift from the previous target of $170 per tonne by 2030. This adjustment reflects ongoing negotiations over the economic impact on the oil and gas sector and the balance between climate goals and industrial competitiveness in Canada.
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Moving the target to $130 by 2040 instead of $170 by 2030 is a massive softening of the incentive. It changes the math for any firm planning long term capital expenditures for decarbonization.
Exactly. If the price floor drops and the timeline stretches, the urgency to integrate carbon capture or switch to electric boilers disappears. Who is going to risk the CAPEX when the penalty is lower and further away?
Basically a deal to lower the cost of polluting for another decade. Interesting to see how this affects the competitive edge claims from the industry leaders mentioned in the related stories.
Lower prices mean longer payback periods for industrial efficiency upgrades. If the carbon price isn't biting, the budget for heat pumps or waste heat recovery just doesn't get approved.
