The Canadian federal government has formalized tax credits for enhanced oil recovery (EOR) as part of its spring economic update. This move allows oil and gas companies to claim credits for carbon capture and storage systems that inject CO2 underground to extract more oil. The policy shift follows a memorandum of understanding with Alberta and has sparked debate over whether these credits act as a direct subsidy for fossil fuel production. The government maintains the measure will encourage more carbon storage and improve energy security.
