Not Just Pipelines: Why Carbon Is the New Cross-Border Commodity

A new era of cross-border collaboration is emerging in carbon removal infrastructure, with North American countries forging partnerships that could reshape the global climate response. Recent investments and strategic alliances between the United States, Canada, and Mexico are creating an interconnected network of carbon capture and storage (CCS) projects that promise to accelerate decarbonization efforts across the continent.

This collaborative approach isn't just about sharing technology, it's about building the foundation for a continental carbon management system. The partnerships span everything from shared financing mechanisms to coordinated regulatory frameworks, signaling a maturation of the carbon removal sector.

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Canada's Bold Investment Strategy

Canada has positioned itself as a leader in this cross-border carbon infrastructure movement. In July 2025, the Canadian government announced $21.5 million in investments toward cutting-edge carbon capture technologies in Alberta, demonstrating the country's commitment to becoming what officials call an "energy superpower."

The investment targets three key areas that highlight the collaborative nature of modern carbon removal projects. These include CO2 storage site development, subsurface analysis technologies, and cleaner diesel engine solutions that can be deployed across borders.

United States: Industrial Scale Implementation

The United States is approaching carbon capture through massive industrial partnerships and federal policy support. The Inflation Reduction Act's 45Q tax credits provide up to $85 per tonne for direct air capture and $60 per tonne for industrial capture, creating the economic foundation for large-scale deployment.

ExxonMobil's proposed $5 billion carbon capture hub in Texas aims to store 50 million tonnes of CO2 annually by 2030, with pipeline connections planned to Canadian facilities. Meanwhile, Occidental Petroleum's direct air capture plant in Texas represents the world's largest commercial DAC facility, processing 1 million tonnes annually.

Mexico: Bridging North American Networks

Mexico's participation focuses on connecting North American carbon infrastructure through strategic geographic positioning and industrial partnerships. The country's National Carbon Capture Strategy, launched in 2024, targets the petrochemical corridor along the Gulf Coast for initial deployment.

PEMEX is developing three major CCS projects in Veracruz and Tabasco, with planned pipeline connections to US Gulf Coast facilities. The Mexican government's $2.8 billion climate investment package includes specific funding for cross-border carbon transport infrastructure.

Strategic Partnerships Driving Innovation

The collaboration involves major energy companies working across national boundaries. Inter Pipeline, through its partnership with Entropy Inc., is developing the Bow Valley Carbon project, which will store CO2 emissions from their Cochrane Extraction Plant and validate further carbon sequestration potential in Western Alberta.

Enbridge is also playing a crucial role through its Open Access Wabamun Hub north and west of Edmonton. This project represents a new model of inclusive infrastructure development, where five nearby Indigenous communities will have the opportunity to co-own the CO2 transportation and storage infrastructure.

Technology Transfer and Shared Infrastructure

The cross-border nature of these projects becomes evident in their technology sharing approaches. The North American Carbon Corridor initiative connects Canadian storage expertise, US industrial scale, and Mexican strategic positioning into an integrated system.

Companies like Enhance Energy Inc. are developing projects that span multiple countries, with CO2 captured in US industrial facilities, transported through Mexican pipeline networks, and stored in Canadian geological formations. This trilateral approach maximizes each country's strengths while sharing costs and risks.

Multi-National Technology Platforms

1. Geophysical Subsurface Technologies – OptiSeis Solutions Ltd. is advancing cleaner, data-driven technologies for enabling low-carbon energy futures
2. Engine Emission Reduction – OCCAM's Technologies is developing breakthrough solutions for internal combustion engines, targeting emissions between 5–30 tonnes of CO2 per day
3. Scalable Storage Solutions – Projects designed to accommodate various industrial sources across multiple jurisdictions

Regulatory Alignment and Financing Mechanisms

The success of cross-border carbon infrastructure depends heavily on regulatory coordination. Canada's approach through the Energy Innovation Program (EIP) demonstrates how governments can create frameworks that encourage international collaboration while maintaining national priorities.

The program supports research, development, and demonstration across three strategic streams. These include capture technologies for different emission sources, carbon storage and transportation solutions, and utilization technologies that enable large-scale, long-term CO2 sequestration.

Country	Key Policy Framework	Tax Incentives	Cross-Border Coordination
Canada	Energy Innovation Program (EIP)	CCUS Investment Tax Credit up to 60%	Shared storage standards with US
United States	Inflation Reduction Act 45Q Credits	$85/tonne DAC, $60/tonne industrial	Trilateral pipeline agreements
Mexico	National Carbon Capture Strategy	Industrial tax deductions up to 40%	Regional carbon market integration

This regulatory alignment creates a framework where CO2 captured in one country can be transported and stored in another, with compatible accounting standards and shared liability frameworks. The three countries are developing harmonized environmental assessments and coordinated permitting processes for cross-border carbon infrastructure projects.

Global Market Implications

These North American partnerships are setting the stage for broader international collaboration. The continental approach to carbon management creates a model that Western European countries are watching closely, particularly as they develop their own cross-border carbon infrastructure initiatives.

The financial mechanisms being developed also have global implications. Canada's Carbon Capture, Utilization and Storage Investment Tax Credit, combined with similar incentives in the United States, creates a competitive advantage for North American carbon removal projects. This economic environment attracts international investment and technology transfer.

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Market Transformation Indicators

The Path Forward

The transformation of carbon removal from isolated national projects to integrated continental systems represents a fundamental shift in climate strategy. These partnerships demonstrate that effective carbon management requires coordination across borders, sectors, and technologies.

As these projects move from development to deployment, they're creating the infrastructure foundation for a continental carbon economy. The success of these North American initiatives will likely influence similar collaborations in other regions, potentially accelerating global decarbonization efforts.

The collaboration between governments, private companies, and Indigenous communities in these projects also establishes new models for inclusive infrastructure development. This approach ensures that carbon removal projects deliver benefits to local communities while serving broader climate goals.