Can Canada realistically meet its goal of cutting greenhouse gas emissions by up to 45 per cent within eight years?
According to one of the country’s largest business groups, the answer lies in making a few strategic decisions — and doing so quickly.
It includes the aggressive pursuit of carbon capture and storage projects, expanding Canada’s low-carbon power grid, promoting R&D investment and bolstering the country’s role in North American supply chains for the growing wave of zero-emissions vehicles.
A new paper prepared by the Business Council of Canada for Ottawa says these “must-do actions” are needed if the country is going to reach its climate ambitions.
“It’s going to be hard, it’s going to be costly and policy matters,” said Goldy Hyder, president of the council, which represents CEOs of more than 150 large Canadian companies.
“These are the things that you must have in your emissions-reduction plan if we’re going to have any chance at hitting our targets in 2030.”
The document was sent to Environment Minister Steven Guilbeault and Natural Resources Minister Jonathan Wilkinson last week as the government prepares Canada’s 2030 emissions plan, which must be released by the end of March.
Last April, the Trudeau government announced Canada would toughen its climate targets that were initially agreed to as part of the 2015 Paris climate accord.
Instead of aiming for a 30 per cent drop in emissions (from 2005 levels) by the end of the decade, the goal now stands at 40 to 45 per cent.
Details on how to get there remain a work in progress, however.
The government’s plan has some core elements in place, such as capping emissions from the oil and gas sector. It has also mandated that all new pickup trucks and cars sold in Canada by 2035 must be zero emissions.
Since December, the government has received about 20,000 public submissions as part of its overall process to build the national blueprint.
“We are in the throes of actually finishing that (plan) and I would say we’ve taken enormous strides,” Wilkinson said Wednesday during an online Empire Club of Canada event.
“But there’s still some work to do and certainly none of this is easy.”
The paper says Canada must build on the country’s advantages in resources and technologies.
It should engage the public and “chart an orderly long-term transition” to minimize economic and regional dislocations, which is no small feat.
One of the business council’s key recommendations rests on the development of carbon capture, utilization and storage (CCUS) projects, burying CO2 deep underground.
Hyder said tax credits promised in last year’s budget are critical for Canada to keep pace with other countries where public funding has been provided to such projects.
The report calls for governments to help offset the financial risk of such large capital investments through low-cost financing, access to carbon credits and longer-term carbon price certainty.
The paper was produced in consultation with the business council’s working group on climate and energy transition, co-chaired by Intact Financial CEO Charles Brindamour and Shell Canada president Susannah Pierce.
Shell is one of several companies that recently proposed a major CCUS project in Alberta. Separately, five of the country’s largest oilsands producers are pitching a carbon capture network that would connect to at least eight facilities in the province.
“For investors in CCUS, one of the challenges that we’ve had has been cost and certainty of the investment,” Pierce said in an interview.
“This is where governments can help us get over that initial hurdle.”
Pierce said the multinational company views Canada as a mature CCUS market with regulations and experience in place — including the company’s own experience building the Quest project, which captures emissions from the Scotford bitumen upgrader.
While the idea of promoting carbon capture and storage developments has the backing of the oil and gas sector and the Alberta government, it faces opposition from other corners.
Last month, hundreds of academics signed a letter pressing Ottawa to abandon its proposal to provide a tax credit for CCUS projects, calling it a substantial new fossil fuel subsidy.
“If the oil and gas companies want to do it themselves, no one is stopping them,” added Keith Stewart, Greenpeace Canada’s senior energy strategist.
“But we don’t see why the taxpayer should hand billions of dollars to companies that are making billions.”
Canada’s oil and gas industry accounted for 26 per cent of all emissions in the country in 2019, while the transportation sector made up 25 per cent.
As electric vehicles gain greater popularity, the country must increase the role of Canadian companies in the supply chain for manufacturing net-zero vehicles in North America, according to the business council.
It recommends creating a strategy that supports continued investment in vehicle assembly and parts production, along with research in advanced battery technologies.
It suggests accelerating the adoption of EVs by expanding incentives for consumers to purchase vehicles and charging systems.
As for the electricity sector, more than 80 per cent of Canada’s power generation comes from non-emitting sources such as hydro and renewables. However, the country needs to at least double its generating capacity and infrastructure to reach its decarbonization goals, according to the council.
“Despite decades of talk, little progress has been made in linking provinces that have surplus clean electricity capacity with those that still depend on coal-fired electricity,” the document notes.
To reach the 2030 goal, the government and private sector need to prioritize areas that will have the greatest effect on lowering emissions and can be pursued quickly, said Hyder.
“We have a lot of work to do in a very short period of time,” he added.
“There are a lot of other things that need to be done, but these ones cannot be left off the table.”
Chris Varcoe is a Calgary Herald columnist.
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