First carbon contract for difference in Canada a strong step forward to unlock low-carbon growth

The Canada Growth Fund’s first carbon offtake agreement should be a stepping stone towards a broader contract for difference program

Clean Prosperity Executive Director Michael Bernstein made the following statement about the Canada Growth Fund’s new carbon credit offtake and equity agreement with Entropy Inc.:

“Today marks an important first for stimulating low-carbon economic growth in Canada. The novel carbon credit offtake agreement between the Canada Growth Fund and Entropy, if offered more broadly, is the kind of mechanism needed to provide certainty within Canada’s carbon credit markets. This agreement will create good jobs for Canadians and showcases Alberta and Canada’s leadership potential in the carbon capture and storage industry.

“Creating carbon pricing certainty through contracts for difference and offtake agreements can be the tipping point for a range of low-carbon projects and give Canada the boost it needs to compete with the US for new low-carbon investment. Clean Prosperity will release research in the new year showing that carbon contracts for difference are the key to unlocking up to 33 megatonnes of emissions reductions by 2030.

“Today’s agreement allocates a significant portion of the government’s initial allocation of $7 billion to one of many firms eager to reduce emissions. While this is a positive step for industrial decarbonization, getting the most out of Canada’s industrial carbon markets will ultimately require a broad-based program of carbon contracts for difference. 

“The novel carbon credit offtake agreement between the Canada Growth Fund and Entropy, if offered more broadly, is the kind of mechanism needed to provide certainty within Canada’s carbon credit markets.”

Clean Prosperity Executive Director Michael Bernstein

“Making these contracts available to any low-carbon project developer using standardized contracts will help Canada’s existing industries decarbonize and draw in new investment for low-carbon industries like carbon capture, hydrogen, and low-carbon fuels. As it learns from early deals such as this one, we encourage the federal government and the Canada Growth Fund to move quickly from a bespoke program to a more systematic approach to addressing certainty.”

Clean Prosperity has long advocated for the implementation of a broad-based carbon contracts for difference program in Canada. Learn more at cleanprosperity.ca/creating-carbon-market-certainty/.

For more information: media@cleanprosperity.ca

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