The Canadian federal government has formalized a policy shift to allow enhanced oil recovery (EOR) projects to access carbon capture and storage tax credits. This move, detailed in the spring economic update, allows industrial emitters to inject CO2 into oilfields to increase production while trapping the gas underground. The policy creates a tiered credit system where EOR receives half the rate of purely geological or concrete storage. While industry leaders argue this improves Canada's competitive position for investment, environmental critics view the measure as a direct subsidy for oil production.
