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First-of-its-kind carbon credit deal to support Entropy's CCS

$200M investment by Canada Growth Fund, offtake agreement back expansion plans

Phase 1 of Entropy's carbon capture and sequestration technology at use in the Glacier Gas Plant. (Courtesy Entropy Inc.)

Entropy Inc., the Calgary-based company claiming the world’s first post-combustion carbon capture and sequestration (CCS) project for a natural gas site, is developing a full-service carbon capture solution to bring to market for industrial emitters.

Entropy has the support of a $300-million investment from Brookfield Global Transition Fund, and $200 million in late December from the Canada Growth Fund Inc. (CGF), which is combined with a commitment for a carbon credit offtake agreement.

“That is something that has never been done before,” Erik Petursson, vice-president of policy and carbon markets at Entropy, said of the offtake agreement.

The funding will help grow the company beyond its flagship project at the Glacier Gas Plant in Alberta, where a reusable solvent captures carbon dioxide (CO2) emissions from flue gas and traps it underground for long-term storage.

Entropy’s CCS technology

Entropy’s CCS is based on decades of research from the University of Regina’s Clean Energy Technologies Research Institute. Entropy funds the institute and adapts the research for its operations.

“Our goal is to bring a very significant solution across multiple industries where there’s suitability for emissions reduction/CO2 capture,” Petursson told Sustainable Biz Canada.

The company’s targets include natural gas engines, industrial boilers used in fuel and on-site oil production, and turbines for power generation.

Canada’s boilers, engines and turbines account for over 100 million tonnes of CO2 per year, according to Petursson, meaning approximately 15 per cent of the country’s emissions could be addressed with its CCS technology.

Entropy covers the full life-cycle of CCS. In a gas plant, the exhaust from an engine is exposed to a solvent, which stores the CO2. The solvent flows to a regeneration tower, where the CO2 is extracted and injected deep underground. Once it loops back, the solvent can be reused to capture more greenhouse gas.

Entropy monitors and verifies the CO2 once it is stored, ensuring accountability and a precise calculation of the amount of CO2 sequestered.

Petursson touted the effectiveness of the company’s process: 90 to 98 per cent of the CO2 is captured. It is also cost effective, energy efficient, minimizes the reliance on government funding and attracts private capital, he added.

De-risking Entropy with the CGF

The company’s ambition is to scale up its carbon capture to one million tonnes per year in Canada over the next two to three years, and is aiming for over 10 million tonnes of carbon capture projects per year.

Supporting its goals is the CGF, a $15-billion public investment fund backing Canadian cleantech innovators. The CGF is to invest $200 million into Entropy, and provide a fixed-price carbon credit offtake commitment to purchase up to one million tonnes per year of Alberta TIER carbon credits for 15 years.

Described by Petursson as a global first, the CGF setting a price on carbon ($86.50 per tonne) gives Entropy long-term certainty, he said. Without it, “there’s no guarantee that an investment can even recover the capital.”

The carbon credit offtake agreement means Canada has an equivalent de-risking mechanism to what the U.S. offers with the Inflation Reduction Act, which reduces the cost of carbon capture and attracts private capital, he explained.

CGF’s carbon credit offtake also allows Entropy to move to Phase 2 of its main project, the Glacier Gas Plant.

The Glacier CCS project

The Glacier Gas Plant is in Alberta’s Saddle Hills County, a municipality bordering British Columbia, and processes enough natural gas to heat 1.5 million homes per year, according to Petursson.

“It’s the only operating facility in the world capturing post-combustion emissions from natural gas. That is a tremendous accomplishment for Canada,” he said.

Phase 1 went online in August 2022. Petursson said the CCS reduced 47,000 tonnes of CO2 per year from one engine at a cost of $31 million.

Phase 1b will increase the CCS capacity to 63,000 tonnes per year at Glacier Gas Plant, he added. It is expected to cost $14 million as, unlike Phase 1, it will not include a waste heat recovery system.

With the aid of CGF, Entropy can start on Phase 2, which is in the engineering phase. Phase 2 is being designed to capture an additional 185,000 tonnes of CO2 per year.

Entropy’s Canadian and U.S. plans

To reach its goals, Petursson said the company plans to seek more funding for future projects. Some potential sites are in Alberta, Saskatchewan and Ontario due to the economic feasibility and “excellent geology” for carbon storage, he said.

Entropy also has its sights set on the U.S. Plans for large CCS projects that tap into the Inflation Reduction Act are under development by the company.

EDITOR'S NOTE: Advantage Energy Ltd. was not involved in the funding as previously reported.

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