Ottawa announces funding for five Alberta carbon capture projects

COCHRANE – The federal natural resources minister has announced $21.5 million in funding for five Alberta projects that aim to lower the cost of capturing and storing carbon dioxide emissions. 

But Tim Hodgson had few details to share Friday about how talks are progressing with a group of major oilsands players on a separate $16.5-billion carbon capture, usage and sequestration project that remains in limbo. 

“It’s something that’s being worked on actively,” Hodgson said of the massive project proposed by the Pathways Alliance, a consortium that includes six of Canada’s biggest oilsands producers. 

“Those conversations are going on. They’re going to happen in private. When there’s a transaction, we’ll let everybody know. But you should assume that everyone is focused on trying to figure out how to make that happen.”

The projects Hodgson announced Friday are being funded under the Energy Innovation Program, which put out a call for carbon capture, utilization and storage technology proposals.

He made his announcement at the site of Bow Valley Carbon Cochrane Ltd. northwest of Calgary, where emissions from a natural gas extraction plant are to be stored four kilometres underground. Bow Valley is a partnership between Inter Pipeline Ltd. and Entropy Inc. 

It is to receive $10 million to add equipment to the plant, and Hodgson says its emissions reductions will equate to taking more than 12,000 cars of the road a year.

Inter Pipeline chief executive Paul Hawksworth said the investment demonstrates how Canada can work toward becoming an energy superpower. 

“It is a tangible step forward, proving how government, communities and industry can work together to deliver real, tangible and measurable results,” he said. 

Enbridge Inc. is to get $4 million and Enhance Energy Inc. is to receive $5 million for separate storage hubs in Central Alberta. 

The remainder of the funds are going toward a project looking to improve analysis technologies and another to test small-scale carbon capture from diesel engines. 

The announcement comes as uncertainty continues to cloud the Pathways project, which would be one of the largest in the world if built. 

The companies have not made a final investment decision and federal and provincial support remains a question mark.

When asked whether Ottawa would contribute federal dollars on top of an existing tax credit for carbon capture projects, Hodgson said: “I’m not going to negotiate publicly.” 

Pathways would capture carbon dioxide emissions from more than 20 oilsands facilities in northern Alberta and transport them 400 kilometres away by pipeline to a terminal in the Cold Lake area in eastern Alberta, where they would be stored in an underground hub to prevent them from entering the atmosphere. 

Alberta Premier Danielle Smith has pitched a “grand bargain” where that emissions-cutting project would go ahead in tandem with a new crude oil pipeline to the West Coast, which no company has thus far proposed to build. 

Ottawa is weighing which projects deemed in the national interest will be subject to a sped-up regulatory review under newly passed federal legislation. 

This report by The Canadian Press was first published July 4, 2025.

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