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Carbon Engineering CEO Daniel Friedmann, right, talks with Toby Stedham, vice president of operations, at the company's direct air capture pilot plant, in Squamish, B.C., on Jan. 26, 2023.DARRYL DYCK/The Globe and Mail

Lucy Hargreaves is the vice-president of corporate affairs and climate policy at Patch, a carbon-market platform. She is on the board of Oceans North, a non-profit organization that supports marine conservation.

A sole, small reference in a footnote on page 393 of Canada’s 2024 budget could have huge ramifications for Canadian climate action: the words “carbon dioxide removal.”

As part of the Treasury Board Secretariat’s plan, the $134.9-million allocated to the government’s Low-carbon Fuel Procurement Program can now be used to purchase carbon dioxide removal (CDR) services.

Initially, this procurement will be used to help Canada reach its goal of reducing emissions from a select group of government aircraft, vessels and tactical vehicles to reach net-zero fleet emissions by 2050. While no new funds are being allocated to CDR, there is now flexibility to procure CDR as part of the net-zero goal for fleet emissions.

In my view, this is the first step toward putting the government’s weight behind Canada’s CDR industry, sending market signals that are absolutely critical for early-stage CDR projects that require growth capital to scale to gigatonne levels by 2050.

Canada is not the first government to take this type of action. We’ve already seen the U.S. Department of Energy (DOE), the government of Denmark and the International Energy Agency commit to buying carbon removal and delivering their own demand signals.

Just last week, Denmark made the largest-ever government purchase of carbon removal, a deal worth US$166-million. Earlier this year, the DOE announced US$100-million in funding for CDR pilot projects and testing facilities with the goal of rapidly scaling engineered solutions. That’s part of the US$3.7-billion the U.S. has committed to CDR, including two large-scale direct air capture (DAC) facilities in Texas and Louisiana.

While Canada is certainly not the first, we’ve already demonstrated we can punch above our weight, with Deep Sky partnering with Climeworks to bring a megatonne of DAC capacity to Quebec. Carbon Engineering, the Canadian firm that developed the technology being deployed in the world’s largest DAC facility, in Texas, opened its first test plant in Squamish, B.C., in 2015 and is now exporting that technology around the world.

With continued investment in improving efficiency, combined with this country’s plentiful renewable energy resources, Canada could become one of the world’s biggest carbon removers. To meet Ottawa’s climate targets, Carbon Removal Canada estimates we’ll need 312 million tonnes of annual CDR by 2050. By building that capacity here at home, analysis indicates Canada would create more than 300,000 jobs and generate $143-billion in GDP.

But if we don’t act fast enough, there is no guarantee that we can achieve these carbon removal targets by 2050. The technology is still just far too nascent.

When it goes online, the Texas facility powered by Carbon Engineering technology will be capable of removing 500,000 tonnes of CO2 per year, with the potential to scale to a megatonne. But it’s estimated the world will need about 10 gigatonnes of durable CDR annually by 2050 – a minimum of 10,000 such facilities – to meet our climate goals.

We need to start building and improving and scaling capacity now. This will require both governments and the private sector to step up as buyers of CDR.

First, governments have the ability to invest at a much greater scale than private businesses. Paired with a long-term vision for the climate, they can move markets with more intentionality and can take on some of the risk to pave the way for private capital, which needs a shorter-term path to profitability.

This first step from the Treasury Board Secretariat is just that – a first step.

But private capital must then take over. It has the ability to move much faster toward individual solutions in a decentralized way. That means there can be no more excuses from business to delay contributing to novel CDR.

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