Carbon capture, utilization and storage in British Columbia

Prepared by the Government of British Columbia, June 2024. Questions should be directed to the province of British Columbia.

Table of contents

• Introduction
• The B.C. advantage
• Regulatory framework for sequestration
• Fiscal supports
• Research and development
• Homegrown innovators

Introduction

British Columbia (B.C.) is committed to climate action. That commitment was affirmed in October 2021, when B.C. released the CleanBC Roadmap [sic] to 2030 (the Roadmap), which is a detailed plan that outlines how B.C. will meet its climate goals. The expanded climate actions in the Roadmap, which is a follow-up to the 2018 climate strategy, accelerate the transition to a net-zero future and ensure that B.C. meets its legislated greenhouse gas target of 40% below 2007 levels by 2030. In March 2021, B.C. also established sector-specific emissions targets for oil and gas (33 to 38% below 2007 levels) as well as other industrial sectors (38 to 43% below 2007 levels). To learn more and to read the Roadmap, visit CleanBC.

The Roadmap includes several targeted actions to reduce greenhouse gas emissions produced by industrial sectors, including the oil and gas industry, and identifies carbon capture, utilization and storage (CCUS) as a key emissions reduction strategy. CCUS has the potential to play an integral role in supporting B.C. to meet its emissions reduction targets, including net zero by 2050, by:

• Contributing to emissions reductions at industrial facilities, including within sectors where emissions are challenging to abate, such as cement.
• Lowering the carbon intensity of hydrogen produced from natural gas.
• Removing carbon directly from the atmosphere to balance emissions that cannot be abated or avoided, at the facility level.

To further support the Roadmap, in March 2023 B.C. introduced the New Energy Action Framework. The New Energy Action Framework provides strong, enforceable emissions reduction requirements to ensure B.C. achieves its 2030 oil and gas sector emissions target while creating good, sustainable jobs in the transition to a cleaner economy. Under the framework, the Province will:

• Require all proposed LNG facilities in or entering the environmental assessment process to pass an emissions test with a credible plan to be net zero by 2030.
• Establish a regulatory emissions cap for the oil and gas industry.
• Establish a clean energy and major projects office (CEMPO) to fast-track investment in clean energy and technology.
• Create a BC Hydro task force to accelerate the electrification of B.C.’s economy.

The CEMPO offers project management support across the entire life cycle of various projects including CCUS. The CEMPO will work with internal and external partners to identify opportunities and challenges for the development of a robust clean energy sector in B.C. that enables investments in CCUS.

The B.C. advantage

B.C. holds several advantages in relation to CCUS deployment, including suitable geology for carbon storage in northeast B.C. (NEBC), an established and experienced single-window regulator in the British Columbia Energy Regulator (BCER), and an active research and development sector. B.C. innovators are having a global impact in the CCUS space. B.C. is also a prescribed jurisdiction for the federal CCUS Investment Tax Credit (ITC), signalling B.C.’s readiness for further CCUS development.

Sedimentary basins are highly suited for carbon dioxide (CO₂) storage. Several sedimentary basins are located within B.C. including the Western Canada Sedimentary Basin (WCSB), the Interior Basins and the Offshore Basins. In northeast B.C., the geology of the WCSB is well understood after decades of oil and gas exploration and development. Geological assessments for CO₂ storage have also been completed confirming that the WCSB in northeast B.C. provides suitable porous and permeable reservoirs for significant CO₂ storage in depleted natural gas pools and deep saline formations. Information on these geological formations is publicly available. In 2023, work concluded on a Northeast BC Geological Carbon Capture and Storage Atlas, funded by B.C.’s Ministry of Energy, Mines and Low Carbon Innovation and the B.C. Centre for Innovation and Clean Energy. The Atlas provides a detailed summary of potential storage reservoirs in northeast B.C.

The practice of geological CO₂ storage is not a recent development in the province. B.C. has experience with CO₂ injection and storage through acid gas disposal projects that operate in northeast B.C. This experience demonstrates a track record of safe operation and an experienced regulator – the BCER. Since 1996, over 2.7 million tonnes of CO₂ have been successfully injected and stored in conjunction with acid gas disposal projects in that part of the province.

Regulatory framework for sequestration

Carbon capture and storage tenure is regulated under Part 14 (Underground Storage) of the Petroleum and Natural Gas Act (PNGA), sections 125.3–132. The disposition of a storage reservoir licence is done through an application process.

Recent amendments to the PNGA removed restrictions on who can apply for a storage reservoir licence. Amendments to the Petroleum and Natural Gas Storage Reservoir Regulation (PDF, 573 KB), also recently brought in, among other things:

• updated content requirements for applications for storage reservoir exploration licences and storage reservoir licences
• added the requirement for the Minister to consider a specific set of matters when evaluating an application for a storage reservoir licence
• added a minimum depth for storage reservoirs to minimize the risk of contamination of groundwater
• require a transfer of a storage reservoir licence to be approved by the Minister
• encourage active use of storage reservoirs to support emissions reductions

Tenure acquisition

Petroleum and natural gas lease

The holder of a petroleum and natural gas lease has the right to store substances associated with petroleum and natural gas production or processing, in a storage reservoir in the location of the lease. CO₂ that is a by-product of raw natural gas or generated by the processing of natural gas is an eligible substance. Petroleum and natural gas (PNG) lease rights may already be held or acquired through the public tenure process.

Storage reservoir exploration licence

A person who does not hold PNG rights may apply to the Minister of Energy, Mines and Low Carbon Innovation (Minister) for a licence to explore for a storage reservoir, under section 126 of the PNGA. This provides the licence holder with the ability to do work to obtain knowledge of the area and the geological properties of the proposed storage reservoir. The knowledge gained pursuant to the exploration licence may then be used to apply for a storage reservoir licence.

Storage reservoir licence

A person may apply to the Minister for a storage reservoir licence. Applicants are required to submit a range of geological and engineering information to demonstrate their knowledge and expertise in relation to the proposed project area.

The Petroleum and Natural Gas Act gives the Minister discretion in determining the conditions to which a storage reservoir licence is subject. Consultations are conducted with First Nations; Crown ministries and agencies; and municipalities or regional districts.

For a more detailed description of the tenure process, please see Guide to Acquire Storage Reservoir Exploration Licences and Storage Reservoir Licences.

Project permitting

The BCER has a comprehensive regulatory regime with experience in the injection and storage of fluids related to oil and gas disposal activities. Recent amendments to the Energy Resource Activities Act expand the role of the BCER as the regulator for pipeline transport of CO₂ and storage regardless of the source of the CO₂. The BCER has been engaged for many years in the development of CCS requirements with multiple agencies, from research to a national standard, and has engaged with various project proponents. The Carbon Dioxide Storage Application Guide (PDF, 564 KB) for companies interested in sequestering CO₂ generated by facility operations may be accessed on the BCER’s website.

Low-carbon hydrogen production

In July 2021, B.C. released the B.C. Hydrogen Strategy: A sustainable pathway for B.C.’s energy transition (PDF, 1.4 MB). The B.C. Hydrogen Strategy outlines the pathway ahead to increase clean innovation and investment; reduce emissions; and achieve provincial climate targets, including net-zero emissions by 2050. It outlines 63 actions for government, industry and innovators aimed at accelerating the production, use and export of renewable and low-carbon hydrogen. With B.C.’s support of low-carbon hydrogen development comes the objective of finding permanent storage solutions for the byproduct of CO₂ when hydrogen is produced from natural gas feedstock. Improving the viability of CCUS projects is a vital part of supporting hydrogen development in B.C.

Fiscal supports

Federal level supports applied to B.C.

Federal CCUS Investment Tax Credit (ITC) – Federal legislation, released June 2024, included B.C. as a designated jurisdiction, along with Alberta and Saskatchewan to be eligible for the federal CCUS ITC. The decision to acknowledge B.C.’s eligibility under the tax credit was concluded after a detailed review by Environment and Climate Change Canada in collaboration with B.C., on B.C.’s regulatory regime.

B.C. initiatives

CleanBC Industry Fund

The CleanBC Industry Fund (CIF) supports the development, trial and deployment of projects that reduce greenhouse gas (GHG) emissions from large industrial operations in B.C. It is available to Reporting Operations under the Greenhouse Gas Industrial Reporting and Control Act (GGIRCA), defined as operators with emissions over 10,000 tonnes of CO₂e per year. There are 3 funding streams. The Emissions Performance funding call supports projects that reduce emissions at an industrial operation using commercially available technologies. The Industrial Electrification Program provides capital funding for industrial operations with large electrification projects to reduce greenhouse gas emissions. The Innovation Accelerator funding call supports projects that involve the demonstration, pilot or trial of clean technologies or processes with the potential to reduce emissions for industry in B.C. The Feasibility Studies funding call supports preliminary studies that aim to provide clarity and confidence to potential projects intending to apply for funding through the other 3 streams. CCUS projects are eligible for all streams, except Industrial Electrification.

Offsets

The B.C. Offset Program is enabled under a regulatory framework comprised of the GGIRCA and the Emission Offset Project Regulation. Under this framework, offset protocols provide the monitoring, verification and reporting requirements to generate B.C. offset credits based on a given project type. B.C. developed a protocol for the technology-based capture and permanent storage (sequestration) of CO₂ emissions from industrial sources and the atmosphere. The protocol is intended to quantify the emissions impact and verify the permanence of emissions sequestration for offset projects in B.C. Public consultation on the draft protocol closed on December 14, 2023.

Innovative Clean Energy Fund

Established in 2007, the Innovative Clean Energy (ICE) Fund supports the development of pre-commercial clean energy projects and technologies. Two examples of projects related to CCUS that have received funding are Carbon Engineering for advancing its direct air capture technology and Svante to support its CO2MENT project with LaFarge Canada. Currently, the ICE Fund has a Joint Call Partnership with Sustainable Development Technology Canada that has been running since 2017 to support the development and commercialization of new technologies that will reduce emissions and create jobs. Eligible projects are required to be within the Technology Readiness Level range of 4 to 7. Sixteen projects have been approved under the partnership, with total project costs estimated at $338 million.

British Columbia Low Carbon Fuel Standard

British Columbia Low Carbon Fuel Standard (BC-LCFS) was introduced in 2008 to reduce greenhouse gas emissions from transportation fuels. It is designed as a market transformation and technology-agnostic policy that creates a financial incentive to reward the supply of lower-carbon fuels in proportion to emissions mitigated when lower-carbon fuels are substituted for conventional fossil fuels.

Between 2010 and 2023, BC-LCFS recorded an increasing supply of lower-carbon diesel and gasoline fuels, mitigating over 22.6 million tonnes of CO₂e globally. BC-LCFS established its credit market and Initiative Agreement program, which drives investment in local fuel production and supply. Projects supported by the Initiative Agreement program have committed to investing over 2 billion dollars in emissions reductions in B.C.’s fuel industry, contributing to GDP and job creation. On January 1, 2024, the Province implemented the Low Carbon Fuels Act as the modernized framework to keep BC-LCFS an adaptive and effective policy. Under the modernized framework, BC-LCFS is on track to deliver about 21.3% [5.7 million tonnes CO₂e] of the Province’s CleanBC expected emissions reductions in 2030.

Tradeable credits can be accrued for executing CCUS emission mitigation technologies along a supply chain or lifecycle of a lower-carbon transportation fuel supplied to B.C. BC-LCFS enables credits for certain CCUS and permanent carbon dioxide removal executed at a fuel production facility of eligible fuels. These credits may be used to comply with BC-LCFS or sold in its credit market to generate additional revenue. In 2023, credits had a minimum and maximum price of around CAD$200 and CAD$510, respectively, averaging around CAD$470 each. One LCFS credit equals one tonne of lifecycle CO₂e reduced relative to BC-LCFS CI reduction targets.

For more information, visit www.gov.bc.ca/lowcarbonfuels

InBC Investment Corporation

The InBC Investment Corporation (InBC) is an independent $500-million strategic investment fund created by the Government of British Columbia in 2021. Its mandate is to help promising companies grow while generating returns that benefit all British Columbians. InBC will invest in high-growth potential businesses in B.C. and leverage investments from the private and public sectors to help these businesses grow. Startup and early-stage companies working on innovative CCUS technologies and processes are potential areas for investment. InBC has a “triple bottom line” investment mandate that aims to establish B.C. as a globally competitive low-carbon jurisdiction; promote values that make life better for British Columbians (including job creation, advancing reconciliation with Indigenous peoples and promoting diversity and inclusion); and achieve a financial return on investment.

Research and development

B.C. has an active CCUS-related research and development sector. The sector is involved in the general application of technologies, as well as in specific aspects of the value chain, including capture and conversion. A high-level overview of ongoing research initiatives with provincial support, including opportunities for geological storage in the Western Canada Sedimentary Basin, are listed below.

B.C. Centre for Innovation and Clean Energy

Founded in October 2021, the B.C. Centre for Innovation and Clean Energy (CICE) is an independent, not-for-profit corporation that helps fund the commercial development and scaling of made-in-B.C. clean energy solutions — from Canada to the world. The Government of British Columbia, the Government of Canada, and Shell Canada have committed up to $105 million of funding for CICE. CICE brings together innovators, industry, governments and academics to accelerate the commercialization and scale up of B.C.-based clean-energy technologies. It is a catalyst for new partnerships and world-leading innovation to deliver near- and long-term carbon emission reductions. CCUS, along with the production, use, and distribution of low-carbon hydrogen are areas of focus for CICE.

Carbon Management Canada

Carbon Management Canada (CMC) is committed to reducing emissions in heavy industry through technology development, applied research and CCUS implementation support. In collaboration with CMC’s host organization, BC Research Inc., clients can access and utilize a facility in Richmond, B.C., where the performance of carbon capture and conversion technologies that use flue gas of up to 1 tonne per day can be assessed in a practical manner. Clients can simulate different industrial conditions by adding impurities to replicate flue streams from a variety of industrial applications, for example, steam methane reforming for hydrogen production; natural gas-powered electricity generation; and well-stack flaring, as well as chemical, petrochemical, steel, and cement manufacturing.

CarbMin Lab

The CarbMin Lab at the University of British Columbia is working to further develop knowledge and technology relating to large-scale CO₂ sequestration in industrial waste. CarbMin Lab researchers focus on natural carbon mineralization processes that remove CO₂ from the atmosphere through chemical reactions with rock. This process would create long-term carbon storage in carbonate minerals. The CarbMin Lab has become a world leader in low-temperature carbon mineralization research as shown by pilot demonstrations to accelerate CO₂ uptake at ultramafic mine tailings sites; regional studies to quantify total carbon mineralization potential in B.C.; and analogue studies to understand carbonate formation processes and the safety of CO₂ storage. The CarbMin Lab collaborates with several mining company partners and international research centres, and is supported by both the federal and the provincial governments.

Geoscience BC

Geoscience BC is an independent, not-for-profit society that collaborates with resource sectors, academia, communities, Indigenous groups, and governments to develop and share objective and credible earth science research and data. Geoscience BC is using its experience in building and managing consortiums that characterize deep saline aquifers as a water source for hydraulic fracturing and water disposal to identify and assess geological CCUS targets in the Western Canadian Sedimentary Basin in northeastern B.C. Geoscience BC is also supporting researchers, industry and governments to identify and index favourable areas to sequester carbon in ultramafic rocks in B.C. and to assess their potential to mineralize carbon. In January 2023, Geoscience BC released the Northeast BC CCS Atlas, estimating a significant storage capacity of 4.2 giga (billion) tonnes of CO₂ in depleted oil and gas pools and deep saline aquifers, sufficient for over 300 years at current emission rates from the oil and gas sector in NEBC. The atlas was funded through CICE. A summary of this project and a copy of the atlas is available at Geoscience BC.

Solid Carbon: A Negative Emissions Technology Feasibility Study

Solid Carbon is an ambitious project to sequester CO₂ permanently and safely as rock. Its vision is to extract CO₂ directly from the air or ocean; then, using deep ocean technology powered by ocean-based wind and solar energy, to inject the CO₂ into the subsea floor basalt, where it will mineralize into solid carbonate rock. This multi-year study involves international collaboration and is supported by Ocean Networks Canada and the Pacific Institute for Climate Solutions.

Homegrown innovators

B.C. is home to established companies and start-ups that are developing technologies and processes that represent significant contributions to the CCUS space. Some examples of homegrown innovators include the organizations listed here.

BC Biocarbon

BC Biocarbon is a late-stage start-up established in 2011 that utilizes pyrolysis and gasification technology in their biorefinery process to convert biomass into high-value, high-utility products, with a primary focus on carbon sequestration. BC Biocarbon’s demonstration plant in McBride, B.C. runs at 1 tonne input per hour and can sequester approximately 50 to 70% of the carbon from the primary biomass in biochar and biotars. This results in approximately 3.1 tonnes of CO₂e sequestered per tonne of biochar produced. The company has plans for multiple plants around North America, with each plant processing 5 to 20 tonnes per hour feedstock input and sequestering a minimum of 30,000 tonnes CO₂e per year.

Carbon Engineering

Founded in 2009, Carbon Engineering (CE) is a clean-energy company headquartered in B.C. CE is focused on the deployment of direct air capture (DAC) technology that captures CO₂ directly from the atmosphere so it can be permanently stored deep underground or used to produce clean, affordable transportation fuels. From a pilot plant in Squamish, B.C., CE first removed CO₂ from the atmosphere in 2015 and produced its first low-carbon intensity fuel in 2017. Built in 2021, CE’s Innovation Centre in Squamish is the company’s permanent advanced development headquarters and where the team continuously work to optimize and improve its technologies.

Ekona Power

Ekona is a Burnaby-based company that is developing a novel methane pyrolysis solution for clean hydrogen production. Ekona’s solution converts natural gas into hydrogen and solid carbon, thereby reducing CO₂ emissions when compared with conventional processes, like steam methane reforming. Ekona’s unique pyrolysis reactor uses the principles of combustion and high-speed gas dynamics to dissociate feedstock methane. It is low-cost, scalable, easy to integrate and leverages existing natural gas infrastructure to deliver a practical solution for clean hydrogen, wherever and whenever it is needed.

Svante Technologies Inc

Svante offers companies in emissions-intensive industries a commercially viable way to capture large-scale CO₂ emissions from existing infrastructure, preventing the gas from entering the atmosphere. The technology developed by Svante captures CO₂ from flue gas, concentrates it, then releases it for safe storage or industrial use, all in 60 seconds. The technology is tailored specifically to the challenges of separating CO₂ from nitrogen contained in diluted flue gas generated by heavy industries such as cement, limestone and large-scale hydrogen production.

Svante has partnered with Lafarge Canada and Total on a CCUS demonstration project, CO2MENT, consisting of a pilot plant capturing 1 tonne per day of CO₂ from Lafarge’s cement plant in Richmond, B.C. The next phase of the project is to demonstrate CO₂ utilization solutions such as reinjecting it into low-carbon fuels, CO₂ concrete and fly ash.