Carbon Capture and its Role in Alberta’s Climate Future
The Government of Canada announced more than $21.5 million towards carbon capture projects in July 2025, including $10 million in funding for the Bow Valley Carbon Cochrane project. Bow Valley Carbon, led by Inter Pipeline Ltd. and Entropy Inc., plans to sequester 40,000 tonnes of CO2 emissions yearly nearly 4km below the Cochrane Extraction Plant, pictured here. This project is expected to have an initial service date in late 2026.
Photo credit: Androsov, iStock
Mobilizing Alberta is an initiative from the Office of Sustainability aimed at increasing engagement on climate change across Southern Alberta. Through Climate Action Grants, a Climate Conversation Speaker Series, and the Preparing Albertans for Climate Change e-course, Mobilizing Alberta provides a foundation on which Albertans can build awareness and support meaningful climate action. Over the next few months, we’ll share a series of informative blog posts to answer frequently asked questions, clear up common misconceptions, and break down climate solutions in a straightforward, easy-to-understand way.
Since the ratification of the Paris Agreement in 2015, the international community has agreed to reduce carbon emissions, which have been identified as a leading cause of climate change. This reduction in emissions from human activity is meant to mitigate the effects of climate change and keep the average global temperature increase below two degrees Celsius.
Carbon management programs, which include a variety of solutions including carbon capture, are a vital part of the plan to reduce carbon emissions here in Canada. We’ll take a closer look at what carbon capture and storage actually involves, the benefits and drawbacks, and what it could mean for Alberta.
What is carbon capture?
Carbon capture is a technology that removes carbon dioxide from the atmosphere and stores it — think of it like a high-tech vacuum that sucks industrial emissions from the atmosphere. In Canada, carbon capture and storage (CCS) is primarily used by the oil and gas industry as a way to manage carbon dioxide emissions. Often, the captured CO2 is compressed and transported and used to extract more oil or injected into deep geological formations.
The Alberta Energy Regulator (AER) regulates two types of carbon capture in Alberta:
- CCS, also known as “CO2 sequestration, “traps carbon from the atmosphere and permanently stores it.
- Carbon Capture, Utilization, and Storage (CCUS), also known as “CO2 enhanced oil recovery and storage,” is designed to improve the production of residual oil and permanently store some CO2.
How does carbon capture work?
Carbon capture works by extracting CO2 directly from an industrial source (e.g., upgraders, which convert bitumen to lighter crude oil) or the atmosphere through direct-air capture technology. The captured CO2 is transported via pipeline, and either injected underground for permanent storage (CCS), or injected into underground oil and gas reservoirs. Captured CO2 is often used in enhanced (or tertiary) oil recovery, which allows more oil to be extracted from a reservoir than through primary and secondary methods.
Why is Alberta considered a leader in carbon capture?
The energy industry is a major contributor to Alberta’s economy, and as a result, the province has invested heavily in funding technology that supports the extraction of fossil fuels — especially technology that may help improve efficiency or reduce emissions. Since 2008, Alberta has invested in CCUS. The province has established the first regulatory and risk-management framework for CCUS in Canada, and has invested more than $1.2 billion into the Quest and Alberta Carbon Trunk Link (ACTL) projects.
The provincial government has also created the Alberta Carbon Capture Incentive Program, which provides grants to “help accelerate the development of CCUSe in Alberta.” The program aims to support industries to reduce carbon emissions through grants towards CCUS capital costs, and supports a variety of sectors, including oil sands, oil and gas production, enhanced oil recovery, petrochemicals, power generation, and manufacturing and cement production. The Alberta government claims “CCUS is currently the only viable option available” to help these industries significantly reduce their emissions.
The process for carbon capture and storage.
Alberta Energy Regulator
In 2025, the Alberta government made changes to the Technology Innovation and Emissions Reduction (TIER) system, which allows companies to invest in on-site emissions reduction technology, including carbon capture, rather than paying an emissions fee to the government or purchasing carbon credits. The change is designed to incentivize companies to invest in “Alberta-made” emissions reductions technology “that works for their specific businesses,” protecting jobs and making Alberta companies more competitive.
What are the benefits of carbon capture?
The main benefit of carbon capture solutions is that they remove carbon dioxide from the atmosphere. Both the provincial and federal government have put significant funding and policy support behind carbon capture, and insist it could play an important role in decarbonizing Canada’s oil and gas and heavy industries. The Alberta government claims that developing CCUS will “help Alberta capitalize on emerging opportunities, such as clean hydrogen development.”
What are the drawbacks of carbon capture?
Like any technology, carbon capture comes with risks, but for proponents of the technology those risks seem low compared to the risks associated with failing to reduce carbon emissions. Still, it’s important to be aware of the full picture. Drawbacks of carbon capture include:
It’s expensive. Carbon capture requires significant investment in research, development, and the construction of necessary infrastructure. It’s estimated that carbon capture costs up to 10 times more than cutting the same emissions using renewables like wind and solar. CCS costs range from $15 to $120 (USD) per metric ton of captured carbon, depending on emissions source, and Direct Air Capture projects can range between $600 and $1,000 (USD) per metric ton due to the amount of energy needed. The federal government has invested $9 billion in the technology to date.
Many projects aimed at commercializing CCS have been proposed, but over 80% of them end in failure for a variety of reasons, from capital cost to opposition from the public (or other industry stakeholders) to the type of project.
It poses environmental risks. In addition to the environmental costs of building the infrastructure, injecting carbon dioxide into geological formations could result in leakage into the atmosphere or surrounding groundwater.
Additionally, the infrastructure required can have land use impacts, which vary according to the size of the project and the sensitivity of the area in which projects are being built.
- It often results in increased oil extraction. CCUS is primarily used to increase the production of residual oil; most CO2 being captured is used to extract more oil out of the ground that otherwise would have been out of reach. Around 70% of the carbon captured in Canada through CCUS is being used to help extract more oil.
Pie chart showing Alberta’s 2023 emissions by sector from the 2025 National Inventory Report.
Government of Alberta
- It only accounts for a fraction of emitted CO2. Currently, there are approximately 45 commercial carbon capture facilities in operation worldwide. While there are around 700 in various stages of development globally, and capacity and technology are improving all the time, investment lags behind. In 2023, carbon capture had the capacity to store 49 million metric tonnes of CO2 annually. That’s just 13% of the roughly 37 billion metric tonnes of the world’s annual energy and industry-related CO2 emissions.
So what does this mean for Albertans?
Many in favour of carbon capture, including the Alberta government, consider it a “necessary pathway” to reducing emissions from existing energy systems. They see it as a way to help Alberta transition to a low-carbon future. Critics see carbon capture as a form of greenwashing, as the technology is often used to increase oil and gas production even as companies claim environmental responsibility.
It’s important to recognize that reducing emissions by creating fewer emissions in the first place is still the most effective way to mitigate climate change. Carbon capture technology is just one solution in a whole range of options, many of which bring economic benefits and opportunities with them.
Interested in learning more?
Understanding our energy system can help you better understand how carbon capture technology fits in. You can learn more at Student Energy, which includes an energy system map and more information about how our energy system works, from sources to end-use. The Alberta Energy Regulator also has more information about CCUS, as it regulates two types of CCUS processes.
Preparing Albertans for Climate Change
Check out the free e-course Preparing Albertans for Climate Change. It’s packed with science-based information and resources about next steps we can all take to make sure our communities are resilient. The module Diversifying Energy covers our system as it is now, the innovations and opportunities available, and what we can do in our own communities to address climate change.