Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC)
Canada
Financial support for carbon mitigation projects
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|openingDateJanuary 01, 2022
- grant_single|closingDateDecember 31, 2040
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Manufacturing
grant_single|grantors
- Canada Revenue Agency (CRA)
- Natural Resources Canada (NRCAN)
grant_single|status
grant_card_status|open
grant_single_labels|preview
The Investment Tax Credit (ITC) for Carbon Capture, Utilization, and Storage (CCUS) is a refundable tax credit available for eligible expenses incurred in CCUS projects from January 1, 2022, to December 31, 2040. The program supports the acquisition of assets for capturing CO2 emissions from fuel combustion, industrial processes, or direct air capture, and its subsequent transportation, storage, or utilization, provided at least 10% of the captured CO2 is used in qualifying activities like geological storage or concrete production in Canada or the U.S. Eligible applicants are taxable Canadian corporations engaged in CCUS projects.
grant_single_labels|projects
This grant application does not specify eligible geographical areas, suggesting it may be nationally available to all qualifying Canadian companies. The eligibility is based on the company being a taxable Canadian corporation, without restrictions to specific regions.
grant_single_labels|admissibility
Eligibility for this grant is determined by specific criteria related to the corporation's nature and the project activities.
- The applicant must be a taxable Canadian corporation, including a taxable Canadian corporation that is a member of a partnership.
- There must be an eligible CCUS project with eligible CCUS expenditures incurred between January 1, 2022, and December 31, 2040.
grant_eligibility_criteria|who_can_apply
To qualify for the Crédit d'impôt à l'investissement (CII) for Carbon Capture, Utilization and Storage (CUSC), applicants must be:1. A taxable Canadian corporation, which can include members of a taxable Canadian partnership.2. Engaged in a qualifying CUSC project with eligible CUSC expenditures incurred between January 1, 2022, and December 31, 2040.
grant_eligibility_criteria|who_cannot_apply
This grant does not specify certain types of companies or industries that are explicitly excluded from eligibility. Eligibility is primarily based on the nature of expenses and project criteria rather than excluding specific industries.
grant_eligibility_criteria|eligible_expenses
Eligible projects under this grant are focused on Carbon Capture, Utilization, and Storage (CCUS) processes to minimize CO2 emissions and utilize captured carbon effectively. These projects include capturing CO2 from various sources, transporting it, and storing or using it in eligible ways.
- Capture of CO2 that would otherwise be released into the atmosphere.
- Capture of CO2 directly from the ambient air.
- Transportation of captured carbon.
- Storage of captured carbon in a dedicated geological storage.
- Usage of captured carbon in the production of concrete within Canada or the United States through eligible CO2 storage processes in concrete.
grant_eligibility_criteria|zone
The CII for CUSC covers various categories of expenses directly associated with capturing, transporting, utilizing, and storing carbon.
- Eligible expenses related to carbon capture proportionate to the amount of CO2 the project is expected to handle for storage or eligible use.
- Eligible expenses related to carbon transportation proportionate to the amount of CO2 the project is expected to handle for storage or eligible use.
- Eligible expenses related to carbon utilization for acquiring properties expected to handle the use of captured carbon solely for producing concrete in Canada and the U.S. using an eligible CO2 storage process in concrete.
- Eligible expenses related to carbon storage for acquiring properties expected to handle the storage of captured carbon solely in dedicated geological storage.
grant_single_labels|criteria
grant_single_labels|register
- Step 1: Conduct the Initial Environmental Impact Certification (EIIC)
- An obligatory step to be performed before submitting the project plan.
- Step 2: Complete the Prescreening Questionnaire
- Answer the questionnaire to determine your eligibility and that of your project.
- Step 3: Prepare and Submit the Project Plan
- Use the secure RNCan portal to upload your project plan.
- Include detailed technical documentation and any other required information.
- Step 4: Initial Project Evaluation by RNCan
- RNCan evaluates the submitted project plan for adherence to CUSC criteria.
- Additional information may be requested if the initial documentation is insufficient.
- Receive the initial project evaluation via the RNCan secure portal.
- Step 5: Application Decision and Communication
- ARC, in conjunction with RNCan, determines if your CUSC project qualifies as one or multiple projects.
- ARC informs you of the decision regarding project determination.
- For each project determination, submit a project plan within 180 days of the notice.
grant_single_labels|otherInfo
This grant provides financial support for eligible expenses related to carbon capture, utilization, and storage projects undertaken between January 1, 2022, and December 31, 2040. This initiative is managed by the Canada Revenue Agency and Natural Resources Canada.
- Projects must handle at least 10% of the captured CO2 in an eligible manner to qualify.
- Eligibility is limited to taxable Canadian corporations.
- There are four categories of eligible expenses: capture, transport, utilization, and storage of carbon.
- The carbon must be used in approved ways, such as geological storage or concrete production in Canada or the U.S.
Apply to this program
Carbon Capture, Utilization, and Storage Credit Investment Tax (CCUS ITC)
The Carbon Capture, Utilization, and Storage Credit Investment Tax (CCUS ITC) is a refundable tax credit applicable to eligible expenses incurred for qualified CCUS projects between January 1, 2022, and December 31, 2040. This incentive aims to support capturing CO2 emissions from fuel combustion, industrial processes, or the air, transporting and storing the captured carbon, or utilizing it in industries like concrete production in Canada and the U.S.
Detailed Explanation of the Carbon Capture, Utilization, and Storage Credit Investment Tax (CCUS ITC)
The Carbon Capture, Utilization, and Storage Credit Investment Tax (CCUS ITC) is a significant financial incentive introduced by the Canadian government to promote environmental sustainability and encourage industrial innovation. This refundable tax credit is specifically designed for projects involved in capturing, utilizing, and storing carbon dioxide (CO2) emissions, offering a substantial opportunity for industries aiming to reduce their carbon footprint.
Eligibility and Applicability
The CCUS ITC is available for costs incurred for qualified CCUS projects within the time frame of January 1, 2022, to December 31, 2040. To be eligible for this credit, the applying entity must fulfill several conditions: 1. **Taxable Canadian Corporation**: The applicant must be a taxable Canadian corporation, which may also be a member of a partnership. 2. **Qualified CCUS Project**: The project must involve the capture of CO2, which would have otherwise been released into the atmosphere, its transport, and subsequent usage or storage in compliance with eligible uses. 3. **Minimum Utilization**: At least 10% of the captured CO2 must be utilized in eligible applications such as geological storage or carbon sequestration in concrete. 4. **Eligible Expenses**: The expenses must fall under one of the four specified categories: carbon capture, carbon transport, carbon utilization, or carbon storage.
Categories of Eligible Expenses
Eligible expenses for the CCUS ITC fall into four main categories: 1. **Carbon Capture Expenses**: These costs are proportionate to the amount of CO2 the project manages to capture for storage or usage. This encompasses equipment and technology dedicated to capturing CO2 emissions. 2. **Carbon Transport Expenses**: These include capital expenditures for transporting the captured CO2 to a storage or utilization site. The extent of the credits depends on the CO2 volume managed by the transport system. 3. **Carbon Utilization Expenses**: This category pertains exclusively to expenses incurred for equipment used in integrating CO2 into concrete production processes in Canada or the U.S. 4. **Carbon Storage Expenses**: Expenses under this category are strictly for acquiring equipment necessary for dedicated geological storage of the captured CO2.
Process for Applying for the CCUS ITC
Step 1: Preliminary Self-Assessment
Before delving into an application, corporations should first assess their project's eligibility based on the provided criteria. This ensures that their initiatives align with the defined objectives and requirements of the CCUS ITC.
Step 2: Conduct a Preliminary Site Visit
A Preliminary Site Visit (PVS) is a mandatory step where corporations must provide details and initial plans to the appropriate authorities. This early evaluation helps ensure the project's feasibility and adherence to regulations.
Step 3: Submit the Project Plan
Before commencing operations, the corporation must submit a detailed project plan to Resources Natural Canada (RNCan). This plan should encompass: 1. Comprehensive project overview. 2. Detailed descriptions of the CO2 capture, transport, utilization, and storage processes. 3. Technical specifications and anticipated outcomes. 4. Cost estimations and timelines. This initial submission must be completed either before the start of commercial operations or by September 19, 2024, if the project was in commercial operation before June 21, 2024.
Step 4: Initial Project Assessment (IPA)
The Initial Project Assessment involves a thorough review by RNCan. The project undergoes a detailed evaluation to ensure it meets the CCUS requirements. If necessary, RNCan can request additional documentation or clarifications. Once satisfied, RNCan issues an Initial Project Evaluation (IPE), certifying the project’s compliance with the CCUS ITC criteria.
Step 5: Ongoing Compliance and Reporting
After receiving an IPE, corporations must maintain compliance with the project’s terms and conditions. This involves regular reporting, monitoring of CO2 capture volumes, utilization processes, and ensuring no major deviations from the approved plan. RNCan may periodically review and assess the project to verify continued compliance.
Key Considerations and Benefits
The CCUS ITC provides an array of benefits for corporations committed to reducing their environmental impact: 1. **Financial Incentives**: The tax credit aids in offsetting the capital costs associated with CCUS projects, making the venture financially viable. 2. **Environmental Impact**: By adopting CCUS technologies, corporations contribute significantly to reducing greenhouse gas emissions and combating climate change. 3. **Industry Leadership**: Engaging in CCUS projects positions corporations as leaders in environmental stewardship and sustainability, enhancing their market reputation. 4. **Long-term Viability**: The credit extends through 2040, providing a long-term financial framework for businesses to plan and execute their CCUS projects. Nonetheless, corporations must diligently adhere to the eligibility criteria and compliance requirements to maximize the benefits of the CCUS ITC. Mismanagement or deviations could lead to disqualification or reduced benefits, underscoring the importance of thorough planning and consistent reporting.
Conclusion
The Carbon Capture, Utilization, and Storage Credit Investment Tax (CCUS ITC) stands as a pivotal initiative in Canada’s endeavor to promote industrial sustainability and environmental conservation. By providing substantial financial support for eligible CCUS projects, this tax credit not only encourages corporations to adopt eco-friendly practices but also aligns with global efforts to mitigate climate change. With a meticulous application process and a commitment to compliance, businesses can leverage the CCUS ITC to foster innovation, reduce carbon emissions, and contribute to a greener future.
