Canada is an ideal country to host carbon removal projects and could reap $143 billion in economic activity from the sector by 2050, according to a report by Carbon Removal Canada (CRC).

In Ready for Removal: A Decisive Decade for Canadian Leadership in Carbon Dioxide Removal, CRC advocates for carbon removal as “a really important tool in the climate tool kit” to rapidly and responsibly act on Canada’s greenhouse gas emissions.

The Toronto-based CRC says the country can lead on the climate solution while creating 332,000 jobs — primarily in Western Canada — by mid-century, according to one scenario in the report.

“I think what’s lost in carbon removal is that it’s a solution that’s not a silver bullet against a toolbox of solutions, but ultimately, it’s optimistic. It’s about building solutions to a difficult problem,” Na’im Merchant, executive director of CRC, said in an interview with Sustainable Biz Canada.

Canada can be a global leader in the growing carbon removal industry if helpful government policies and regulations are put in place, the report argues. The Canadian government has made carbon capture and removal a key pillar of its climate strategy, though the International Energy Agency has cautioned against relying on carbon capture to achieve national climate goals.

CRC is a project of the Clean Prosperity Foundation, a climate policy organization that advocates for carbon pricing, cleantech and carbon removal.

Canada’s carbon removal potential

To meet Canada’s climate targets, CRC found Canada must remove between 91 to 318 megatonnes of carbon dioxide per year by 2050. 

Canada can be a “global leader in scaling-up carbon removal,” Merchant said. CRC lists:

• its geology that can store gigatonnes of carbon;
• abundant clean electricity to power the carbon removal facilities;
• ample land and coastline to site the projects;
• a skilled workforce; and
• an innovation ecosystem that has already fostered almost 70 carbon removal companies in the country, such as Carbon Engineering, CarbonCure and Deep Sky.

A commissioned analysis by Navius Research suggests removing one megatonne of carbon dioxide per year would create over 1,000 jobs and contribute over $460 million to Canada’s GDP. Jobs would be concentrated in construction, with other openings in operations, engineering and transportation, among others.

Alberta and Saskatchewan are highlighted as major investment sites because of their carbon storage potential, and being home to thousands of oil and gas workers who could be re-trained into the carbon removal industry.

If Canada takes the initiative on carbon removal, Merchant said the country can be early on de-risking and vetting the technology’s commercial potential.

Ensuring Canada stays ahead

But carbon removal gets “a fraction of a fraction of a per cent” of the funding that goes toward the clean energy transition, Merchant said. The report cites research that claims only US$200 million was allocated to new carbon removal capacity worldwide from 2020 to 2022 — a tiny portion of the US$1.7 trillion that is expected to be invested in clean energy in 2023.

While Canada has advantages, federal and provincial governments must move quickly on policy to ensure it stays ahead of incentives from the United States and European Union, the report states.

This could mean creating demand incentives to encourage public and private actors to buy carbon removal credits. The Canadian government could directly purchase carbon removal services from projects that are built in Canada, or create an investment tax credit for carbon removal, for example.

The report suggests the Canadian government could also foster innovation by easing access to government funding for demonstration-sized carbon removal projects and establishing a carbon removal research, development and demonstration centre.

To ensure carbon removal projects are built responsibly, CRC urges protocols on carbon capture, involving Indigenous Canadians in the sector, and streamlining the permitting and siting processes.

“We don’t want to have a carbon removal sector that’s creating unforeseen problems,” Merchant said.

Investors could also be better educated about carbon removal and its economic model, he added.

The report also identifies some Canadian catalysts of corporate action, including Shopify and BMO’s investments into carbon removal. BlackRock and JPMorgan Chase are cited as two major examples from the U.S.