Canada's 2009 federal budget includes support for the clean
technology industry and introduces measures intended to benefit
developers of carbon capture and storage technology, an emerging
area. The support includes not only early-stage funding for
research and development, but also promises a modification of tax
rules to enhance the financial attractiveness of projects once they
Carbon Capture And Storage: Another Perspective On Clean
The federal government's support for Carbon Capture and
Storage (CCS) technology reflects the reality that "Clean
Technology" can be approached from various perspectives. From
a simplified perspective, there are two ways that humans can
consume energy without adding to the amount of greenhouse gases
(GHGs) in the atmosphere. They use energy resources that do not
emit GHGs when they are consumed, hence the appeal of renewable
energy resources such as hydro, wind and solar. Another way is to
ensure that when non-renewable energy sources such as fossil fuels
are used, the carbon dioxide (CO2) (one of the most
common GHGs) that results from their combustion is not released
into the atmosphere. One method of preventing the release of
CO2 is to capture and store it underground. This is
where CCS shows its potential to contribute to the Canadian
government's stated objective of reducing greenhouse gas
emissions by 20 per cent from 2006 levels by 2020.
CCS typically involves transporting captured CO2 by
pipeline to underground storage, possibly in the very sites from
which fossil fuels were originally extracted. CO2GeoNet,
a network of European scientists specialized in the study of CCS,
views CCS as the creation of "a closed loop in the energy
production system, whereby the carbon extracted from the ground
originally in the form of gas, oil and coal is returned back again
in the form of CO2."
According to a report released by the Nobel Prize-winning
Intergovernmental Panel on Climate Change (IPCC), CCS could
potentially reduce CO2 emissions by over 80 percent in a
typical plant. However, CCS technology remains a new and developing
area; the first carbon capture prototype was completed in 2007, and
the first demonstration plant, located in the northeast German city
of Spremberg, began operating in September 2008. CCS technology has
yet to enter commercial use.
Federal R & D Support And Consultation On Tax
Canada's 2009 federal budget provides $1 billion over five
years to support the clean technology industry, with $150 million
earmarked for research and $850 million for development and
demonstration of proposed technologies. The government specifically
mentioned CCS as an area of strategic importance in its budget
documents, and it is clearly seeking to build on its years of
involvement in this sector. Over the past decade Canada has hosted
two pivotal IPCC workshops on CCS, and its previous budget included
support both for full-scale CCS demonstration technology in
Saskatchewan and for research on carbon storage in Nova Scotia.
The government also signalled its intention to reform tax rules
with respect to the allowable depreciation on specific equipment
used in CCS technology. Specifically, it plans to introduce
accelerated capital cost allowance (CCA) on selected CCS equipment,
which would both defer the payment of taxes due and make the
technology more attractive to potential investors. The government
will consult with industry stakeholders before identifying specific
equipment that would be eligible for accelerated CCA.
The federal budget also provides $10 million to the Canadian
Environmental Sustainability Indicators initiative, a program
designed to track the country's environmental progress by
reporting on key indicators including air quality and GHG
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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