Takeaways

• Prime Minister Mark Carney is expected to visit Calgary to unveil a new industrial carbon pricing agreement with Alberta.
• The proposed deal could raise Alberta’s effective industrial carbon credit cost to C$130 per metric ton by 2040.
• The agreement is also linked to Alberta’s broader energy expansion ambitions, including a proposed new oil pipeline to the Pacific Coast.

Canadian Prime Minister Mark Carney is expected to travel to Calgary on Friday to announce a new industrial carbon pricing agreement with Alberta, according to sources familiar with the discussions.

The proposed deal marks a major step in ongoing negotiations between the federal government and Alberta over emissions policy and the future of Canada’s energy sector. Sources told Reuters that the agreement would gradually strengthen Alberta’s industrial carbon pricing system while supporting the province’s efforts to expand oil exports.

The new framework is expected to increase the effective cost of carbon credits in Alberta’s industrial market to C$130 per metric ton by 2040. Alberta’s current industrial carbon credits trade between roughly C$20 and C$40 per ton, levels many experts say are too low to encourage companies to invest in cleaner technologies.

Read More: Carney’s Climate Strategy to Centre on Industrial Carbon Price

The agreement would also introduce higher carbon price floors over time. According to one source familiar with the negotiations, Alberta’s headline industrial carbon price would rise from the current C$95 per metric ton to C$100 next year. It would then increase gradually to C$130 by 2036, followed by annual increases of 1.5% beginning the same year.

The planned announcement would mark Carney’s first visit to Calgary since November, when he met Alberta Premier Danielle Smith to discuss ways to attract more investment into Canada’s energy industry.

Sources said the carbon pricing deal is also intended to help clear the way for Alberta’s proposed one-million-barrel-per-day crude oil pipeline to British Columbia’s northwest coast. The federal government has previously stated that approval for new pipeline infrastructure would depend on oil companies investing in emissions-reduction measures such as carbon capture technology.

Environmental groups have pushed for Alberta’s effective carbon market price to reach C$130 much sooner, arguing that a faster timeline would pressure heavy emitters to act immediately on oil sands emissions and industrial pollution.

However, Alberta officials and members of the oil and gas industry have argued for a slower approach. They say aggressive industrial carbon pricing could hurt Canada’s competitiveness, especially as the country seeks to expand energy exports and reduce dependence on the U.S. market.

Also Read: Carbon Capture Market Forecast: Policy Shifts Fuel Global Growth

Industry leaders continue to stress that regulatory certainty is needed before companies commit large amounts of money to carbon capture technology projects. Adam Waterous, executive chair of Strathcona Resources, told Reuters that firms are unlikely to move ahead with major emissions-reduction investments unless the federal government also removes barriers to pipeline development, including restrictions on oil tankers along Canada’s northwest coast.

A spokesperson for the prime minister’s office did not confirm the planned visit or details of the proposed carbon pricing deal.

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Source: Reuters