Johnathon Sipos is the CEO of Cielo Carbon Solutions, a point source carbon capture company actively involved in carbon capture and natural gas-based power generation projects in Alberta and British Columbia.With the Canadian election now upon us, voters face a pivotal choice between two leaders with different visions for the country’s future. Among the most polarizing issues at the ballot box is how Canada will address carbon dioxide emissions, a challenge that demands both pragmatism and innovation. Mark Carney has lowered the consumer carbon tax to zero while retaining taxes on large emitters. Pierre Poilievre has campaigned on eliminating carbon taxes entirely, speaking to a "Technology not Taxes" framework to replace them. While Carney's approach builds on existing policy and is generally clear in scope, Poilievre's remains less defined, yet it may signal a shift toward a system already proving its worth elsewhere: the 45Q tax credit initiative in the United States..Since 2008, the American 45Q program has facilitated the capture of over 75 million tons of CO2 from industrial emitters, leveraging an incentives-based market-driven model that contrasts with Canada's more punitive approach. Rather than imposing taxes on emissions, 45Q offers tax credits based on the amount of CO2 captured, its source, and its end use, ranging from permanent sequestration — think underground storage or concrete mineralization — to recycling into industrial processes or enhanced oil recovery. Credits vary by application, $85 USD ($123 CAD) per ton for permanent sequestration, $180 USD ($261 CAD) for direct air capture and sequestration, and $60 USD ($87 CAD) for enhanced oil recovery or recycling, among others. This flexibility has spurred innovation, with 15 carbon capture projects fully operational and over 121 in development across the US. By comparison, Canada has just five operational projects and fewer than 10 in development.What might Poilievre be alluding to with his "Technology not Taxes" message? While he hasn't spelled it out in detail, the 45Q system offers a compelling blueprint, one that incentivizes emission reductions through technology and economic benefits rather than penalties. It's a carrot-over-stick philosophy that has garnered broad bipartisan support in the US over the past two decades, sidestepping the divisive backlash that carbon taxes have provoked here in Canada. Division, after all, is rarely the foundation of a nation's success. A less politicized approach, focused on rewarding outcomes, could unite stakeholders across the spectrum..The 45Q system's strength lies partly in its breadth. It doesn't just target sequestration, it also credits CO2 recycling, an area where Canada lags. Having worked in the carbon capture space for over two years, I've seen firsthand the untapped potential of this market. North America's industrial CO2 sector consumes roughly 15 million tons annually, equivalent to the annual emissions of 3.5 million cars, for uses like brewing, food processing, welding, and medical applications among many others. Today, much of this CO2 is produced far from its point of use and shipped thousands of miles at significant environmental and economic cost. A credit like 45Q's $60-per-ton recycling incentive could localize this economy, capturing emissions from industrial sources and redirecting them into these processes nearby, ultimately offsetting new production elsewhere and generating economic benefit for all involved. In Canada, no such incentive exists, leaving a valuable opportunity on the table..Critics might balk at certain 45Q credits, particularly for enhanced oil recovery, where captured CO2 is used to extract more oil and gas. Yet, pragmatism demands we confront reality. Oil and gas aren't disappearing anytime soon and are the backbone of the Canadian economy. In British Columbia, for instance, natural gas meets 70% of the province’s net energy needs. Tripling BC's electrical grid to replace it has no reality in the short-to-mid-term, and that's without discussing the economic prosperity it provides, especially to rural regions. If EOR sequesters CO2 from past extraction and use, in essence offsetting portions of new extraction, isn't that a net gain over the status quo where nothing is sequested? One ton captured and stored is better than nothing, even if the system isn't perfect. A broader, incentives-based approach that embraces all forms of capture and use — sequestration to recycling — could maximize impact without alienating key industries, ultimately finding a common middle ground..Canada's current framework, while effective in some respects, is narrower and less dynamic. Large-emitter taxes push compliance and increase costs but don't reward innovation to the same degree, as seen by the lack of large-scale carbon capture projects in Canada. A shift toward a 45Q-style system wouldn’t mean abandoning the goal of reducing emissions, it adjusts incentives with a freer-market philosophy. Imagine tax credits for every ton captured, whether it's locked underground, turned into concrete, or recycled into a local brewery's beer. The economic ripple effects could be profound, fostering jobs and technologies that position Canada as a leader in the global carbon economy, all the while supporting the continued use of Canadian oil and gas, foundational to our way of life.The US has shown that reducing emissions through a free market, results-driven, less polarizing strategy is possible, one that harnesses private-sector ingenuity without sparking nationwide flashpoints or debilitating the resource sector. Broader technology focused carbon capture incentives, modelled on 45Q, could be Poilievre's "Technology not Taxes" blueprint..This election will offer Canadians a choice on carbon policy, and it is my hope that the next four years bring common sense, economically sound policies that reward and support all efforts to tackle emissions through free market fundamentals, while simultaneously supporting oil and gas, because when it comes to climate and the economy, unity and progress beat division every time.Johnathon Sipos is the CEO of Cielo Carbon Solutions, a point source carbon capture company actively involved in carbon capture and natural gas-based power generation projects in Alberta and British Columbia.
