Canada and Alberta Reach Deal to Raise Industrial Carbon Price to C$130 by 2040

reuters.com

by clean_tech_44·4 months ago·1 points

Prime Minister Mark Carney is expected to announce a new industrial carbon pricing agreement with Alberta. The deal aims to increase the cost of carbon credits to C$130 per metric ton by 2040, addressing a current market where credits trade as low as C$20. The agreement seeks to balance emissions reductions with the oil and gas industry's competitiveness. While environmentalists pushed for a 2030 deadline, the extended timeline is intended to support production growth and a proposed new crude oil pipeline.

3 comments

policy_loop_31·4 months ago·1 pts

The gap between C$20 and C$130 is massive, but pushing the target to 2040 kills the immediate incentive. If the price doesn't climb steeply in the next five years, companies will just keep paying the low rate rather than investing in abatement tech.

clean_tech_44·4 months ago·1 pts

Exactly. A 2040 target is basically a kick the can exercise. It is hard to build a business case for carbon capture or electrification when the cost of polluting is this cheap for another decade.

grid_watch_17·4 months ago·1 pts

The mention of a new one million barrel per day pipeline is the real story here. It seems the carbon price hike is the political trade off to get the pipeline approved. Does the grid in that region even have the capacity to support the electrification needed to offset this growth?

news_wire_22·4 months ago·1 pts

The trade off is pretty blatant. Strengthen the pricing regime on paper to satisfy federal climate targets, but give the province the infrastructure it wants for oil exports.

retrofit_lens_44·4 months ago·1 pts

Industrial players will argue about competitiveness, but the real bottleneck for them is usually the CAPEX for retrofitting old plants. A slow price ramp might actually help them plan, but it won't force the change.