How much funding can be received?

Funds up to 10% of admissible expenses.

What is the deadline to apply?

The deadline to apply is 2040-12-31T23:59:59Z.

Who are the financial supporters of the Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC)?

Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC) is funded by Canada Revenue Agency (CRA), Natural Resources Canada (NRCan)

Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC)

Q: What are Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC)'s eligibility criterias?

Must be a taxable Canadian corporation, including those in a partnership Must have eligible CCUS project expenses incurred between January 1, 2022, and December 31, 2040

Last Update: April 27, 2025

Canada

Financial support for carbon mitigation projects

Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC) at a glance

Eligible Funding

Up to 10% of project cost

Timeline

Open Date : January 1, 2022
Closing date : December 31, 2040

Financing Type

Tax Credits

Eligible Industries

Utilities
Construction
Manufacturing

Grant Providers

Canada Revenue Agency (CRA)
Natural Resources Canada (NRCan)

Status

Open

Overview of the Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC) program

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.

Financing terms and conditions

The Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit provides specific financial incentives tailored to support eligible projects in capturing and utilizing carbon emissions effectively. The financing modalities ensure a structured approach to supporting these initiatives under defined conditions.

Refundable investment tax credit applied to eligible expenses from January 1, 2022, to December 31, 2040.
Credit can only be claimed once per eligible property when considering similar tax credits, ensuring no overlap with other clean economy or regional tax credits.
Credit is accessible through corporate income tax returns filed with the Canada Revenue Agency (CRA).

Eligible projects & activities

Projects capturing carbon dioxide (CO2) emissions from fuel combustion, industrial processes, or directly from the air.
Projects transporting captured CO2 for further storage or use.
Projects storing captured carbon in dedicated geological storage facilities.
Projects using captured carbon in concrete production in Canada or the United States through eligible storage processes.

Eligibility criteria of the Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC) program

The applicant must be a taxable Canadian corporation (including those that are members of a partnership).
The project must be a Carbon Capture, Utilization, and Storage (CCUS) project with eligible expenditures incurred between January 1, 2022, and December 31, 2040.
The project must involve capturing CO2 emissions, either from fuel combustion, industrial processes, or directly from ambient air, and transporting, storing, or utilizing the captured carbon in eligible ways.
At least 10% of the CO2 captured by the project must be used in an eligible manner, such as geological storage or concrete production in Canada or the US.
The applicant must submit a project plan to Natural Resources Canada (RNCan) and receive an initial project assessment before commercial operations commence (or by a specified deadline if already operational).

Who is eligible?

Taxable Canadian corporations (including corporations that are members of a partnership)
Companies with eligible carbon capture, utilization, and storage (CCUS) projects
Businesses in industrial sub-sectors such as concrete, plastics, and fuels

Who is not eligible

Organizations seeking to use captured CO2 for enhanced oil recovery or other non-eligible uses.
Companies that intend to claim more than one clean economy investment tax credit for the same eligible property.
Applicants seeking to apply for both the CCUS ITC and investment tax credits under section 127 of the Income Tax Act (such as the Atlantic Investment Tax Credit) for the same eligible expense.

Eligible expenses

Acquisition of equipment and assets used for carbon capture operations.
Acquisition of equipment and assets used for the transportation of captured carbon.
Acquisition of equipment and assets dedicated to the use of captured carbon in the production of concrete in Canada or the United States via eligible storage processes.
Acquisition of equipment and assets required for the dedicated geological storage of captured carbon.

Eligible geographic areas

Canadian provinces and territories

Eligibility criteria of the Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC) program

Submission of a detailed project plan as required by Natural Resources Canada (RNCan).
Completion of the initial project evaluation (including an EIIC and pre-selection questionnaire).
Provision of sufficient technical documentation to demonstrate that assets qualify as eligible carbon capture, utilization, and storage (CCUS) equipment.
Response to requests for additional information or documentation if current submissions are deemed insufficient for evaluation.

How to apply to the Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit (ITC) program

Conduct the Initial Environmental Impact Certification (EIIC)

An obligatory step to be performed before submitting the project plan.

Complete the Prescreening Questionnaire

Answer the questionnaire to determine your eligibility and that of your project.

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.

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.

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.

Additional information

The CRA administers the credit applications through corporate income tax returns, while NRCan handles technical and scientific evaluations.
Applicants must use the RNCan secure portal for submitting project plans and for review of evaluations.
Specific rules prevent claiming both this credit and certain other investment tax credits for the same eligible property or expense.
If project details change after submission, NRCan may request a revised project plan and updated evaluation.