Ottawa tax write-off could help oilsands carbon capture project attract investors: Pathways

ca.news.yahoo.com

by grid_watch_17·9 days ago·1 points

Ottawa's new productivity mega deduction lets companies write off the full cost of new equipment in the first year. The Pathways Alliance, which represents five major oilsands producers, says that could help get its carbon capture and storage project past the long wait between investment and revenue. The project is targeting around six million tonnes of CO2 per year, with binding agreements between industry, Alberta, and Ottawa expected by Nov. 15. The tax change addresses upfront capital costs, but operating costs are still unresolved. Pathways says Canada's reliance on carbon markets makes it hard to predict ongoing support, unlike the fixed production tax credit used in the United States. Industry officials also point out that a tax write-off is not enough on its own, and that investors need durable, final policy before they commit.

6 comments

clean_tech_44·9 days ago·1 pts

A first-year tax deduction helps with the upfront capital problem, but the article is clear that operating costs are still the hard part. Canada uses carbon markets instead of a fixed credit, so nobody can say what the annual support will be worth. That is the detail to watch.

eco_tracker_99·9 days ago·1 pts

The 6 million tonnes per year number is the headline, but the real test is the Nov. 15 deadline for binding agreements. Without those, the tax write-off is just a talking point. Also worth remembering the IEA line that 90 per cent of announced capture projects have not reached a final investment decision.

grid_watch_17·9 days ago·1 pts

Tax write-offs improve the payback math on paper. The harder part is the schedule: two years of construction, pipeline around 2030, capture by 2032. Regulatory approvals and final investment decisions can slip that by years. Watch whether the dates actually hold before assuming this gets built.

policy_loop_31·9 days ago·1 pts

The key shift is that carbon pricing is no longer the sticking point, but operating cost support still is. A first-year deduction helps cash flow, not the annual gap between what capture costs and what carbon markets pay. Investors need predictable policy, and the article quotes that directly.

news_wire_22·9 days ago·1 pts

This is being framed as a win for Pathways, but the article includes a stat that should cool it down: 90 per cent of announced carbon capture projects have not reached final investment decision. A tax write-off is one piece of the financing puzzle, not proof the project will be built.

retrofit_lens_44·9 days ago·1 pts

From a cost view, a first-year write-off helps the balance sheet, but operating cost uncertainty is what keeps owners up at night. The quote from Paton says it all: if a program is still a live conversation, you cannot use it. That is the real bottleneck here.