Carbon capture rollout lags as industry, Ottawa at odds over who shoulders risk

The question of who should bear the financial risk for pricey carbon capture and storage projects has become a stumbling block slowing the technology's adoption in Canada.

It has been half a year since privately held Entropy Inc. inked a deal with the federal government that saw Ottawa agree to underwrite much of the risk for the company's proposed carbon capture and storage project. 

Entropy said it would go ahead with its $49-million second phase of the project — located at parent company Advantage Energy's Glacier gas plant in Alberta — after the two parties signed the first-of-its-kind deal. Called a "carbon offtake agreement," or "contract for difference," the deal was hailed by many as an example of what needs to be done if Canada is to see a significant rollout of carbon capture and storage. 

But six months after the Entropy agreement, not a single other company has successfully negotiated a similar deal. And the bulk of carbon capture projects proposed for Canada still only exist on paper, with final investment decisions yet to be made.