Carbon Capture in Canada at a Crossroads

By Amy McLellan

Carbon capture is becoming big business in Canada, with megaprojects like Shell’s Quest CCS facility opening up major opportunities for breakbulk and project cargo. But does the escalating trade war threaten the nation’s multi-billion-dollar CCS ambitions?

From Issue 3, 2025 of Breakbulk Magazine.

(5-minute read)

Few could have predicted that in 2025 the prime minister of Canada would be disavowing the long-time special relationship with the country’s southern neighbor and largest trading partner.

But amid an escalating trade war, and President Trump’s suggestions that Canada should become the 51st U.S. state, the new Canadian PM Mark Carney said in late March that the old relationship with the U.S. is over.

For those in the oil and gas industries on both sides of the border, the rhetoric is unsettling. The North American energy market is highly integrated and, in 2023, Canada provided 58% of the volume of hydrocarbons imported by the U.S., as well as 85% of its electricity imports.

The energy and power companies in both countries operate projects that span decades rather than political terms, but even so the spat threatens to create an uncertain investment climate in the short term.

Given the trade row with the U.S., some industry voices are calling for an urgent reset of energy and climate policies to reduce costs and position Canada as a competitive place for investment. A key target is the federal carbon levy on large emitters, which has been instrumental in unlocking investment in carbon capture and storage (CCS) projects.

“The federal carbon levy on large emitters is an example of a policy that is not globally cost competitive and should be repealed to allow provincial governments to set more suitable carbon regulations,” says Lisa Baiton, president & CEO of the Canadian Association of Petroleum Producers.

Fickle Economics

This stance is deeply concerning to those working toward Canada’s climate goals. According to the Canadian Climate Institute, more than 70 industrial and natural resource projects — worth over C$57 billion (US$40 billion) — are moving forward based on the expectation that a carbon pricing system will remain in place.

The institute’s research shows that Canada’s industrial carbon pricing systems, if upheld, would contribute more to emissions reductions by 2030 than any other policy. As Rick Smith, president of the Canadian Climate Institute, puts it: “Industrial carbon pricing is the most important policy Canada has for cutting carbon pollution.”

These political headwinds add to the general chill in the market when it comes to investing in CCS projects, where the investment case can be tough to make. Peter Findlay, research director and head of carbon capture, utilization and storage (CCUS) economics for Wood Mackenzie, says many potential projects are at risk because of “often fickle” economics.

This isn’t just a Canadian issue. In October 2024, WoodMac was tracking 1,200 announced projects globally, but only 10% were operational. More than 60% were in the early stage of development and required “a lot more” investment and market certainty to move into advanced development. Findlay described most as “at risk.”

Analysts believe current incentives are insufficient to spur widespread deployment and developers need alternative revenue pathways, like credit generation and product premiums, to supplement current government support.

For Canada, it’s a key technology for operators and other heavy emitters to reduce their carbon footprint. Approximately one-seventh of the world’s active large-scale carbon management projects can be found in Canada and, by 2030, 368 projects are expected to be operational, with an anticipated capacity to capture 743 Mt of CO2 per year, helping make a significant dent in emissions as the country strives to meet its climate change commitments.

The question is whether the new political landscape will undermine commitment to investing in carbon capture and carbon markets?

Committed Projects

In the meantime, work is moving ahead on committed projects. Last year Shell announced FID on two carbon capture projects in Alberta: Polaris, at its energy and chemicals park at Scotford in Alberta, and the Atlas Carbon Storage Hub, which will provide permanent underground storage for CO2 captured by Polaris. Both are expected to be operational by the end of 2028.

Polaris is designed to capture approximately 650,000 tonnes of CO2 annually from the Shell-owned Scotford refinery and chemicals complex, reducing the Scope 1 CO2 emissions from the refinery by capturing and storing up to 40% and by up to 22% at the chemicals complex.

The captured CO2 will be piped 22km to the Atlas project, a 50/50 JV between Shell and ATCO EnPower, for permanent storage 2km underground in the Basal Cambrian Sands, the same formation used to successfully store CO2 from the Quest CCS facility. In future, Atlas could potentially store carbon for other parties.

Work at Polaris is already well underway, with Sarens taking on heavy-haul and heavy-lift operations, including the transportation and installation of an amine absorber, an amine stripper and a quench tower, building on its previous successful collaborations with Shell.

“Carbon capture is gaining momentum in Canada,” says Jeff Chernish, country manager of Sarens Canada. “There’s a lot of buzz around it. And it’s a proven technology now so we’re starting to see more larger scale projects come through, which is good news for us. Polaris is the first project we have supported in this space. We were able to use our experiences from oil and gas projects, as the columns are very similar.”

The Polaris job involved some key logistical challenges, including deenergizing transmission lines, removing railway arms and evaluating bridge capacities to ensure safe passage of the equipment. Extensive preparations were necessary, particularly around the removal and lifting of overhead power lines, which required 45 days’ notice.

Two Kamag K25 platform trailers with bolsters consisting of 56 axle lines total were used for their load capacity and capability over public roadways. The heaviest component, weighing 866,000 lbs, was meticulously transported, navigating tight corners, railway crossings and power lines.

“The challenges on this project were moving large loads over public roads, so it took a lot of planning and permitting,” says Chernish. “There were power line lifts and rail crossings. A lot of planning goes into it many months in advance of execution.”

It was an eight-day heavy-lift campaign to lift three massive columns, with the amine absorber, at nearly 235 feet, the tallest structure on site. Sarens used its CC6800 crane, supported by a CC2800 as the tail crane.

This may have been Sarens’ first CCS project in Canada, but the company sees real momentum building in what Chernish calls a “win-win” technology. “The owners get to reduce their emissions and their costs because a greener product is better for them,” he says. “We see a good pipeline for the future, with more CCS in the province - it’s definitely on the radar.”

Cutting Emissions

Quest – in which Shell has a 10% stake and operates on behalf of the Athabasca Oil Sands Partnership – has been in operation since 2015, since when it has safely captured and stored more than nine million tonnes of CO2, including about one million tonnes/year CO2 from the Scotford upgrader that would otherwise have been released into the atmosphere.

Heavy-lift specialist Mammoet worked on the rigging engineering, transportation and all lifting activities for the Quest carbon capture and storage facility at the Scotford upgrader site, and has more projects in its sights.

It has also been heavily involved in several FEED and constructability studies, supporting its customers in potential projects such as the Pathways Alliance Carbon Capture Initiative, which involves a group of oil sands companies building an extensive CCS network and pipeline to transport CO2 from multiple sites to a permanent facility in Alberta, and a CCUS facility at the Heidelberg Materials Cement plant at Edmonton, which aims to become the first carbon-neutral cement plant in North America.

Technip Energies won the FEED contract last year for the new facility, which Heidelberg Materials anticipates being operational by late 2026, capturing more than 1 million tonnes of CO2 annually. FID is still pending, however.

“Carbon capture and storage facilities are growing in potential within Canada,” says Cian Dorman, regional director of sales and marketing at Mammoet. “Key drivers seem to include federal and provincial incentives, from tax credits and grants to emissions regulations coupled with a steadily increasing carbon pricing system plus growing corporate and industry investment continue to cultivate prospective CCUS intensification.”

Dorman says companies like Mammoet can provide streamlined logistics and transportation planning, modularization integration to site construction and lifting activities as well as core transportation and crane demands. He says these major projects benefit from having an experienced partner like Mammoet on board.

“Complex and ever-changing infrastructure and engineering requirements mean that early engagement for planning purposes will support in preventing logistical bottlenecks, improving safety, optimizing site design and helping to ensure projects run on schedule and within budget."

Mammoet has a proven track record in facilitating and executing site layout optimization, crane pad and foundation requirements for safe operations, route planning for transporting oversized equipment and minimizing disruptions, and managing unforeseen events.

Green Credentials Count

When it comes to working on projects that are so key to delivering climate goals, companies need to be able to evidence their own decarbonization journey, says Dorman.

“It demonstrates an ability to proactively show market leadership and continuous improvement,” he says, pointing out that in recent years Mammoet has developed the world’s first fully electric powered SPMT trailer and engineered zero-emission cranes, including the world’s largest electric crane, the SK 6000.

Chernish of Sarens Canada agrees. “Anytime we are tendering for projects like this, a portion of the request goes through what initiatives we are doing locally and globally to reduce our carbon footprint,” he says. “And whether it’s the requirements of the bid or not, it’s something we’re doing anyway as part of our responsibility to operate in a cleaner and more efficient manner.”

Whatever the outcome of the current trade row, one thing is clear: the climate challenge isn’t going away, and carbon capture remains a potent technology in the battle to reduce emissions.

The move towards cleaner forms of energy production will be a key talking point during a panel session at Breakbulk Europe 2025. “Energy Opportunities for Project Cargo” will take place on the main stage of Rotterdam Ahoy on Tuesday, 13 May at 1:30pm-2:10pm.

Top photo: Mammoet carries out heavy-lift operations at Shell’s Quest CCS project. Credit: Mammoet