Carbon Removal Coalition Forms With Goal of Attracting $100-million in Project Investments

Leaders in Canada’s nascent carbon-removal industry have joined with several corporate and financial backers as well as the federal government in a bid to attract $100-million in project investments by 2030.

The effort, called the Advance Carbon Removal Coalition, seeks to position the country as a top global player in such technologies as direct air capture, biomass carbon removal and direct ocean capture – all designed to extract carbon dioxide, or CO2, from the atmosphere for storage deep underground.

>> In Other News: Northern Biogas Given Extended Deadline to Complete $10M Landfill Gas Payment

The organizers aim to help establish networks to draw capital from a range of domestic and international investors for projects across the country, and increase demand for credible carbon credits.

The group is slated to announce the coalition’s formation at an Ottawa conference on Thursday hosted by Carbon Removal Canada, a non-profit group that is leading it.

The financial and corporate partners include Bank of Montreal [BMO-T], Royal Bank of Canada [RY-T], ClimeFi, NorthX, Shopify Inc. [SHOP-T] and Vancity, which, along with Ottawa, have collectively contributed $75-million in financing to the industry to date.

“I make the rounds, including internationally, and when it comes to carbon removal, Canada’s hot,” Ed Whittingham, Advance Carbon Removal’s founding director, said in an interview.

“That’s a great thing. We’ve got the right trades who can build these projects, we’ve got sophisticated finance and capital markets, we’ve got companies that understand the tech, we’ve got coastlines and biomass, suitable geology. All those boxes that need to be checked are pretty much checked.”

Meanwhile, the federal government has designed a regulatory and policy framework to support the development of projects, including industrial carbon pricing and investment tax credits, said Mr. Whittingham, an Alberta-based veteran of Canadian environmental and economic initiatives.

Carbon dioxide removal, or CDR, differs from carbon capture and storage, as it extracts the greenhouse gas from the ambient air rather than from point sources such as industrial smokestacks.

Its proponents see it as one of several ways to help slow the changing climate as the world transitions to lower-carbon energy. The global CDR market could be worth as much as US$1.2-trillion by 2050, McKinsey & Company has estimated.

The coalition organizers take some cues from the Business Renewables Centre‑Canada, an initiative of the Pembina Institute that, since its formation in 2019, has helped boost wind and solar development by providing connections for corporate buyers of power purchase agreements. Like that organization, it will not act as an investor itself, but provide a platform.

The targeted level of CDR investment is expected to support an industry that employs a wide range of technologies in locations across the country, and attracts sizable sums of foreign capital for projects, Mr. Whittingham said.

Already, some investments that had been planned for the United States have relocated to Canada as a result of U.S. President Donald Trump’s cancellation of green incentive programs last year.

Today, 78 CDR companies operate in Canada and 48 projects are under way or planned, according to Carbon Removal Canada. Most are small in scale, with current removal capacity of 107,000 tonnes a year. Planned projects would account for 10.9 million tonnes annually, equal to the emissions from 2.4 million gas-powered cars.

Companies developing and planning commercial-scale projects include Carbon Engineering, now a unit of Occidental Petroleum Corporation; Montreal-based Deep Sky Corp.; and Arca of Vancouver.

The coalition’s corporate and financial members have experience moving money into the CDR industry, co-ordinator David Hochhalter said. That includes credit purchases, off-take deals, equity investments and project financing.

The group will concentrate on helping to bring in investment, rather than debating the process’s environmental benefits, he said.

Critics of CDR contend the technology could be used as a cover for increasing fossil-fuel use, and that it can only be effective at a massive scale.

“We’re looking at the importance of financial agreements and financial risk-taking in this space, in order to scale, elevate and bring that understanding – advance the technology so that it is something that is reliable and takes care of some of that skepticism,” Mr. Hochhalter said.

Federal Minister of Environment and Climate Change Julie Dabrusin said in a statement that CDR is key to Canada meeting its net-zero goals, and that the coalition will help the cause by mobilizing investment and supporting the development of projects.

Editor’s note: This article has been updated to state that the federal government, along with financial and corporate partners, have collectively contributed $75-million in financing to the carbon-removal industry to date.