North America's CO₂ Trade Gap Could Cost Billions

Europe is building the policy infrastructure for cross-border carbon storage. North America, which has better geology and more advanced projects, still has no coordinated framework. That gap is a missed opportunity worth billions.

While the UK and EU finalize plans to link their emissions trading systems, the U.S. and Canada are sitting on a combined geological advantage that dwarfs anything in Europe. Yet there is no bilateral agreement between the two countries to recognize CO₂ stored across their shared border.

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Europe Is Moving. North America Is Watching.

In May 2025, the EU and UK reached a landmark agreement to link their emissions trading systems, creating a unified carbon market that lets captured CO₂ flow across borders. Norway's Northern Lights project has already begun accepting cross-border CO₂ shipments, with contracts signed for emissions captured in Sweden and the Netherlands.

These are not pilot programs. These are commercial deals backed by verified storage certificates and policy frameworks that let emitters in one country claim credit for CO₂ stored in another.

The North American Advantage Nobody Is Using

Alberta alone sits on over 100 billion tonnes of estimated storage capacity. The province has safely stored more than 14 million tonnes of CO₂ through its Quest and Alberta Carbon Trunk Line projects. Deep Sky Alpha in Innisfail went from groundbreaking to operational in just 12 months, pulling CO₂ from the air and storing it underground.

The U.S. now has more than 270 publicly announced carbon capture projects worth $77.5 billion. Summit Carbon Solutions is building a 2,500-mile pipeline network connecting 57 ethanol plants to underground storage in North Dakota.

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And yet, there is no mechanism for a Canadian emitter to store CO₂ in the U.S., or vice versa, and receive credit under either country's carbon pricing system. The 45Q tax credit, providing up to $85 per ton for geologic storage, only applies to CO₂ stored within U.S. jurisdiction.

Three Policy Gaps Holding It Back

No Bilateral CO₂ Recognition

Unlike the EU-UK arrangement, there is no framework between the U.S. and Canada that allows CO₂ captured in one country and stored in the other to count toward emissions reductions.

Tax Credits Stay Domestic

A U.S. emitter capturing CO₂ in Montana cannot send it to Alberta's world-class saline aquifers and still claim the 45Q credit, even though Alberta's storage geology is among the best on the planet.

Infrastructure Converging, Policy Diverging

The 2025 Canada-Alberta MOU on CCUS is a big step for domestic CCS, but it does not address cross-border CO₂ trade. Meanwhile, Alberta's first CCS hub started injecting CO₂, and California broke ground on its first commercial storage project. The physical infrastructure is converging toward the border. The policy is not.

Project	Country	Scale
Alberta Carbon Trunk Line	Canada	14.6 Mt CO₂/year capacity
Pathways Alliance	Canada	400 km trunk line to oilsands hub
Summit Carbon Solutions	U.S.	2,500-mile pipeline, 57 ethanol plants
CF Industries Donaldsonville	U.S.	2 Mt CO₂/year permanent storage

The Handshake That's Missing

The Carbon Capture Coalition's 2025 Federal Policy Blueprint calls for expanding CO₂ pipeline infrastructure and streamlining Class VI permitting. A logical next step: bilateral discussions with Canada on cross-border CO₂ recognition.

A few practical moves could unlock this market. Mutual recognition of CO₂ stored across the border for tax credit and carbon pricing purposes. Harmonized monitoring and verification standards. A regulatory pathway for cross-border CO₂ pipeline permits. None of these require new technology. They require political coordination.

Europe figured this out and is acting on it. North America has the geology, the infrastructure, and the investment momentum. What it needs now is the policy bridge to connect it all.