A US-based carbon capture company has shifted its first commercial pilot project to Canada, citing stronger incentives and a more stable regulatory environment.
CarbonCapture Inc., through its subsidiary True North Carbon, is constructing a direct air capture (DAC) system in Innisfail, Alberta, north of Calgary. The project, expected to be operational by the end of October, will capture up to 2,000 tons of carbon dioxide annually — making it the largest system of its kind in Canada.
Chief Executive Officer Adrian Corless said Canadian tax incentives, including a 60% federal investment credit for DAC projects and an additional 12% incentive from Alberta, “significantly improve the economics” of scaling the technology. The company initially planned to launch in Arizona, but a shift in US energy policy and the termination of federal DAC funding prompted the move north.
Bloomberg reported this week that the US Department of Energy plans to terminate $7.6 billion in climate projects following the government shutdown. CarbonCapture’s Arizona DAC hub was among those canceled, accelerating its relocation to Canada.
The company has partnered with Montreal-based startup Deep Sky, which hosts several DAC systems at its Alberta facility. The three-story CarbonCapture structure resembles large air conditioning stacks, designed to pull CO2 from the atmosphere and store it underground. The companies will share operating costs and carbon credit revenues.
Alberta, already home to a robust carbon capture and storage network and the world’s third-largest oil reserves, offers existing CO2 pipelines and underground storage sites. Corless said interconnection in Alberta could happen “in months, not years,” unlike in the US where permitting and energy access posed significant delays.
CarbonCapture had earlier attempted to build a 5-million-ton facility in Wyoming but abandoned the plan due to energy constraints. The Canadian pilot is now positioned as a key step to proving the technology can scale cost-effectively, even though operating costs remain around $1,000 per ton at the pilot stage.
With Canada’s incentives and infrastructure, CarbonCapture says it hopes to accelerate deployment and support the country’s role in the global push to reduce greenhouse gas emissions.
