Justin Trudeau’s Liberal government has committed to an unprecedented agreement with Calgary carbon capture company, Entropy Inc., with the intention to make decarbonization technologies more worthwhile. The idea is to encourage companies to invest in sustainable technology without the fear of losing out on revenue guaranteeing the price of carbon for a certain period of time. The federal government will backstop carbon prices for companies under certain conditions in this offtake agreement to open doors for private-sector companies to innovate new decarbonization projects, per National Newswatch.It was announced Wednesday Entropy Inc., a private company that developed a unique modular carbon capture along with new utilization and storage technology, will be the first company to benefit from the agreement. It will be paid for — to the tune of $200 million by direct investment — by the Canada Growth Fund, which gives Entropy Inc. the framework for a large, long-term, fixed carbon credit offtake. The Canada Growth Fund plans to purchase 185,000 tonnes of carbon credits over 15 years for $86.50 per tonne.Entropy CEO Mike Belenkie explained, “when you have a project that costs hundreds of millions of dollars, it takes a decade or so to pay out.”“So the carbon tax is not a suitable instrument to incentivize that investment," Belenkie said, per National Newswatch, adding the federal contract with his company minimizes the investment risk enough that they will now confidently be able to put $49 million towards its “carbon capture and storage project” at its affiliate company, Advantage Energy’s Glacier gas plant in Alberta. “For us, this is the perfect solution," Belenkie said. "We have 15 years guaranteed offtake, it’s more than enough for us to go out there and know that for the service we provide, we’ll be able to recover our investment."Executive director of Clean Prosperity Michael Bernstein said the agreement is primarily focused on carbon capture, which works out well for most of these private-sector companies. "There’s no direct revenue from carbon capture for a lot of these companies, so there ultimately has to be a business case," Bernstein said per National Newswatch. "These companies need to know that if they’re putting in hundreds of millions of dollars of their own capital, that there’s an economic justification for that.""We’ve been really encouraging the Growth Fund to take that more systematic approach, so the companies know right from the beginning what they might receive," he said.
Justin Trudeau’s Liberal government has committed to an unprecedented agreement with Calgary carbon capture company, Entropy Inc., with the intention to make decarbonization technologies more worthwhile. The idea is to encourage companies to invest in sustainable technology without the fear of losing out on revenue guaranteeing the price of carbon for a certain period of time. The federal government will backstop carbon prices for companies under certain conditions in this offtake agreement to open doors for private-sector companies to innovate new decarbonization projects, per National Newswatch.It was announced Wednesday Entropy Inc., a private company that developed a unique modular carbon capture along with new utilization and storage technology, will be the first company to benefit from the agreement. It will be paid for — to the tune of $200 million by direct investment — by the Canada Growth Fund, which gives Entropy Inc. the framework for a large, long-term, fixed carbon credit offtake. The Canada Growth Fund plans to purchase 185,000 tonnes of carbon credits over 15 years for $86.50 per tonne.Entropy CEO Mike Belenkie explained, “when you have a project that costs hundreds of millions of dollars, it takes a decade or so to pay out.”“So the carbon tax is not a suitable instrument to incentivize that investment," Belenkie said, per National Newswatch, adding the federal contract with his company minimizes the investment risk enough that they will now confidently be able to put $49 million towards its “carbon capture and storage project” at its affiliate company, Advantage Energy’s Glacier gas plant in Alberta. “For us, this is the perfect solution," Belenkie said. "We have 15 years guaranteed offtake, it’s more than enough for us to go out there and know that for the service we provide, we’ll be able to recover our investment."Executive director of Clean Prosperity Michael Bernstein said the agreement is primarily focused on carbon capture, which works out well for most of these private-sector companies. "There’s no direct revenue from carbon capture for a lot of these companies, so there ultimately has to be a business case," Bernstein said per National Newswatch. "These companies need to know that if they’re putting in hundreds of millions of dollars of their own capital, that there’s an economic justification for that.""We’ve been really encouraging the Growth Fund to take that more systematic approach, so the companies know right from the beginning what they might receive," he said.
