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Canadian Parliament Passes Bill C-59, Providing CCUS Investment Tax Credit
26th June 2024
On June 19, 2024, the Canadian Parliament passed Bill C-59, establishing an investment tax credit (ITC) for a clean economy, including for carbon capture, utilization and storage (CCUS) projects. The ITC will cover qualified projects capturing carbon that would otherwise be released to the atmosphere, direct air capture, carbon transportation, and carbon storage. Credit rates vary depending on the project.
Qualified expenditures between 2022 and 2030 for direct air capture (DAC) are eligible for a 60% credit, capture other than DAC are eligible for a 50% credit, and carbon transportation, storage, and use are eligible for a 37.5% credit. For all projects, ITC credit rates decrease by half from 2031 to 2040.
Capture projects must satisfy elibigle uses defined in the legislation, including dedicated geological storage or qualified use of captured carbon in concrete. Carbon utilisation in enhanced oil recovery (EOR) is excluded from the ITC.
For more information on the clean economy ITC, visit the Canadian government’s website here.
Details of the CCUS ITC can be found here.