Canada's $35 billion carbon capture deal: Pathways Alliance cost per tonne and taxpayer risk

thehub.ca

by retrofit_lens_44·2 months ago·1 points

A new analysis from The Hub breaks down the economics of Canada's Pathways Alliance carbon capture project, estimating a total cost of $35 billion for 10 to 12 megatonnes of CO2 captured per year. The authors argue that the all-in cost of abatement could exceed $200 to $250 per tonne, far above cheaper alternatives like methane regulations at $48 per tonne or U.S. power sector decarbonization at $36 to $87 USD per tonne. The article highlights how the project's financial structure relies on carbon contracts for difference, where governments backstop the gap between market prices and a negotiated strike price. Critics say this effectively redistributes costs from oilsands shareholders to taxpayers. The piece questions whether spending $35 billion on carbon capture infrastructure, which produces nothing but disposal, is a better investment than transmission interties, nuclear capacity, or building retrofits that would generate productive assets and lower emissions more cheaply.

3 comments

clean_tech_44·2 months ago·1 pts

The $200-250 per tonne abatement cost estimate is brutal. Compare that to methane regs at $48/tonne. Hard to see how this passes any cost-benefit test unless the real goal is pipeline social license.

eco_tracker_99·2 months ago·1 pts

Exactly. The article makes that point explicitly. It's not climate policy, it's a side payment for export infrastructure. Taxpayers are underwriting the appearance of action while the real abatement happens elsewhere.

grid_watch_17·2 months ago·1 pts

The $35 billion figure includes operating costs over 30 years. But the capital cost alone is over $20 billion and climbing. Alberta's existing CCS facilities have seen costs double or balloon 60%. The risk is one direction only.

policy_loop_31·2 months ago·1 pts

The carbon contracts for difference structure is the key detail. Ottawa and Alberta backstop up to 75 million tonnes of credits between 2030 and 2040. If the market price stays below $20/tonne like it is now, taxpayers cover the gap to the strike price. That's a direct subsidy.

retrofit_lens_44·2 months ago·1 pts

The comparison to building retrofits is worth noting. $35 billion could electrify hundreds of thousands of buildings and finish the methane job. Instead it goes to a disposal system that produces nothing. The opportunity cost is enormous.