Ottawa and Alberta are close to an agreement that would set Alberta’s effective industrial carbon price on a path to $130 a tonne by 2040, CBC News reported, citing sources familiar with the talks.
The potential deal matters because industrial carbon pricing is widely viewed as a central tool for cutting greenhouse gas pollution from heavy emitters, while also shaping investment decisions in major energy and emissions-reduction projects. The agreement is not final: CBC reported that two or three outstanding issues still have to be settled before an announcement can be made.
Under Canada’s broader carbon-pricing framework, a headline price had been expected to rise to $170 a tonne by 2030. The Alberta arrangement now under discussion would follow a different track for heavy emitters covered by the province’s Technology Innovation and Emissions Reduction Regulation, known as TIER.
A slower ramp for Alberta’s industrial system
According to CBC, both governments have agreed that Alberta’s effective carbon price would rise to $130 a tonne by 2040. A source with knowledge of the tentative deal said the price would move from $95 a tonne to $100 a tonne next year, remain at that level until 2030, and then increase in $3 increments until it reaches $130 a tonne in 2040.
The Calgary Herald also reported on that timeline, CBC said.
The proposed price path follows an energy accord signed by the federal and Alberta governments in November, which said the carbon price should “ramp up to a minimum effective credit price of $130/tonne.” Representatives from the Alberta government were expected to join a virtual federal cabinet meeting to discuss the plan, according to CBC.
Investment stakes
Industry participants have said clarity on pricing is important for investors weighing energy projects. CBC reported that the issue is also relevant to the construction and financing of the Pathways Plus carbon capture, utilization and storage project, which was included in the memorandum of understanding.
An announcement could come before the end of the week, CBC reported, with the prime minister tentatively scheduled to travel to Alberta on Friday to appear with Premier Danielle Smith. That timing still depends on whether the remaining issues can be resolved.
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