Canada is poised to be at the forefront of the nascent field of carbon removal — if the incentives and timing are met, Daniel Kelter, director of government relations at Carbon Removal Canada, said.

“We have the most extensive coastlines in the world, we have significant agricultural land, we have geological sequestration potential,” and a culture of innovation and productivity, he listed. “We think all these things mean that Canada can be a leader, and that ultimately, we should be a leader in this space.”

Speaking to Sustainable Biz Canada before Carbon Removal Canada hosted a panel at COP29 about carbon removal, Kelter outlined the state of the industry, which the organization projects could offer an economic boon in the tens of billions of dollars. Though no projects are operating commercially yet, he highlighted the potential to remove millions of tonnes of carbon dioxide (CO2) from the atmosphere and oceans.

But time is short, Kelter said, as the carbon removal industry is approaching a pivotal point where it must start commercialization or face deep challenges.

Carbon Removal Canada is a Toronto-based think tank that advocates for carbon removal as a tool to meet the country’s 2050 net-zero goal. It is a project of the Clean Prosperity Foundation, a Canadian environmental non-profit that also supports Clean Prosperity, an organization that pushes for “market-oriented policies” and a limited role for government to address decarbonization.

Despite that, Kelter said his organization still believes governments should have a significant role in the sector.

Canada can be a carbon removal titan

Canada's natural assets and economy lend themselves to making the country a leader on carbon removal, Kelter explained.

Long coastlines mean a bounty of land to site direct ocean capture infrastructure. Canada’s educated, skilled workforce in the energy sector has transferable skills to carbon removal. A report issued by Carbon Removal Canada in 2023 identified the abundant clean electricity in some provinces as an advantage, ensuring minimal carbon is emitted when being pulled out.

The federal and provincial governments are extending a hand with investment tax credits for carbon capture, utilization and storage (CCUS). The Canadian government also committed to purchasing $10 million in carbon removal credits from 2024 to 2030, which Kelter hopes to see increased in size.

Carbon Removal Canada argues the country must deploy enough of the climate tech to remove between 91 million and 318 million tonnes of CO2 per year by 2050 to meet the net-zero ambition. At the upper range of removal, modelling has found carbon removal could create over 330,000 jobs and add $143 billion to Canada’s GDP by 2050, Kelter said.

In 2023, Canada emitted the equivalent of 702 million tonnes of CO2 in greenhouse gases.

Though British Columbia is a trailblazer in the sector — fostering companies like Squamish-based Carbon Engineering and the province’s government developing a carbon capture and sequestration protocol — Kelter named Quebec and Alberta as two provinces putting their money where their mouth is.

Both have supported Montreal-based Deep Sky (which was on the COP29 panel) and offer a CCUS tax credit. Quebec has a nearly zero-carbon electric grid that can sustainably power carbon removal technology. Alberta’s oil and gas workers can be re-trained to work in the carbon removal sector.

Kelter emphasized how carbon removal should not be an excuse to pollute or delay other climate efforts. Such points have been raised against carbon removal by skeptics, who also question the feasibility of the technology at scale due to the intensive energy consumption and expected high cost.

How to jolt the sector

Canadian players in carbon removal are beginning to move into the demonstration phase, Kelter said. Carbon Engineering and Deep Sky are testing their direct air capture (DAC) technologies and preparing for business. Deep Sky sold its first credits to Microsoft and Royal Bank of Canada earlier this week.

A summary by the International Energy Agency says 27 DAC sites are commissioned globally, the majority being small scale. Only three facilities capture 1,000 or higher tonnes of CO2 currently, and none are in Canada.

The sector must reach commercialization by the critical juncture point of 2030, Kelter said. If projects are not running by then, “the curve to get there and to get to the scale necessary to deal with all of these issues by 2050 just becomes a little bit too vertical,” he warned.

As the majority of carbon removal credits today are transacted in voluntary markets, Kelter said compliance markets must step up to the plate. Compliance markets can be facilitated by an upcoming DAC protocol to be published by Environment and Climate Change Canada, he said, which would let carbon removal companies generate credits for purchase by large emitters.

The policy and business environment for scale-up can be friendlier with government support for research and development, and assistance for demonstration projects, Kelter said. Additionally, a clear measurement and verification standard must be created, so a tonne of CO2 removed can be confidently proven.

So Canada does not bleed talent and businesses to competing countries such as the U.S. (a possibility that Canadian carbon capture company Svante raised) Kelter proposed policies to close the gap. Examples are adding other carbon removal methods besides DAC in the CCUS tax credits, and emphasizing Canada’s infrastructure, clean energy and pool of expertise.

The director also hopes to see carbon removal embedded into national climate targets, which would send a “powerful signal to the private sector saying the government believes in this technology”.