Climate Crunch

➔ Nurturing nature at New York Climate Week

➔ The EV mandate is kicked down the road

➔ General Fusion’s new lease of life comes as global race heats up

Hot takes

➔ The Canada EV mandate is on hold. Another Trudeau-era climate policy suffered a blow when the Mark Carney government paused a rule that mandated automakers to ensure EVs accounted for 20% of sales from 2026. Trade headwinds from the U.S. are partly the reason as is the end of U.S. EV tax credits later this month. Automakers are already reeling from an estimated US$12-billion in tariff costs so far. Several are caught in limbo as they have sunk billions in EV supply chains on a market that’s suddenly lost momentum. It’s a microcosm of the bigger climate-versus-economy debate that’s raging around the world.

➔ The Business Development Bank of Canada is going big on critical minerals. The funding agency’s $200-million Industrial Innovation Venture Fund II, is supporting early-stage startups focused on several areas including key raw materials for clean-energy infrastructure and electric vehicles. Canada needs it: latest data from the Canadian Venture Capital Private Equity Association (CVCA) shows Canadian clean-tech firms raised a paltry $191 million in the first half of 2025, compared to $657 million during the same period last year.

➔ A new global oil rush. Norway likes to imagine itself as the land of the world’s richest—and most ESG-savvy—wealth fund and electric vehicles, but it’s all driven by fossil fuels. But Sylvi Listhaug, whose Progress Party surged to second place in the recently concluded elections, wants Norway to be the “last country in the world to stop (oil) production.” It’s a recurring theme, with Canada among scores of other countries catching the new oil fever. What would it mean for global emissions? Investments in upstream oil was set to fall this year for the first time since 2020, the IEA projects. It could just be a blip.

Dawn of a new Major Projects era

Dawn Farrell, the first head of the brand-new Major Projects Office (MPO), is tasked with fast-tracking several projects that could raise the country’s emissions—or not, depending on how she navigates the country’s twin environmental and economic imperatives. Could Farrell accomplish Canada’s elusive trifecta of building faster, accelerating sustainable growth, and strengthening national unity?

Her nearly decade-long tenure as CEO of Calgary-based utility giant TransAlta Corp., is instructive on how the executive has operated in the past:

• Under her watch, which ended in March 2021, the utility transitioned from coal to natural gas, as part of an industrywide transition to reduce emissions.

• By 2021, TransAlta had completed the full conversion of Keephills Unit 2, Keephills Unit 3 and Sundance Unit 6 from thermal coal to natural gas.

• The energy transition impacted coal workers, with several provincial communities tapping the Coal Community Transition Fund.

• By the end of 2021, TransAlta had cut GHG emissions by 70% from 2005 levels, and exceeded the national 2030 emissions targets in Canada, the U.S. and Australia where it operates.

• TransAlta transformed into one of the largest producers of wind power in Canada and the largest producer of hydro power in Alberta—growing renewable energy capacity from around 900 MW in 2000 to over 2,800 MW in 2021.

The TransAlta journey gives Farrell the cred to help streamline several projects, but now she must elevate it to a national level, where several competing interests—federal, provincial, First Nations and corporations—are jostling for attention.

Oil pipelines, LNG projects, and several renewable energy projects are being proposed, but here are Farrell’s overarching challenges:

• Bringing investor confidence back: The MPO will need to prove Canada can build again—and sustainably. The office will need some early wins to see global capital dip its toes back into Canada.

• Looking past Trump: Yes, there’s a POTUS-sized cloud hanging over Canada, but Europe (hello, Germany), Japan and emerging economies also want our resources. The next wave of projects will need to be pointing east and west, with buy-ins from consuming countries.

• Aligning provincial priorities: Another big rock. If Farrell can get B.C., Alberta and Quebec on the same page, Canada could become a resource superpower.

• Bringing Indigenous groups into the fold: Moving beyond lip service to actual partnerships with Indigenous communities could be the MPO’s most enduring achievements.

Trends, tech and science

➔ An ocean-based carbon removal tech is making waves. Nova Scotia-based Planetary Technologies recently struck a $43.3-million deal with Frontier Climate, which is backed by Shopify, Google, and Meta. The aim? Remove 115,211 metric tonnes of CO₂ between 2026 and 2030 by adding alkaline minerals—like calcium oxide and magnesium oxide—to coastal waters. The process accelerates natural absorption of CO2 and promises storage for over 10,000 years. Frontier believes it can bring the current price tag of roughly US$270 per tonne to US$50–$160 by leveraging existing infrastructure at coastal power plants. It will also preserve marine ecosystems and involve local communities, including the Mi’kmaq Nation.

➔ The dream is alive at General Fusion. The Richmond, B.C.-based, nuclear fusion hopeful recently raised $30 million, after recently enduring layoffs and scaled-back operations. The funds will power its LM26 fusion demonstration program, targeting operational temperatures of 10 million degrees Celsius—an essential step on the path to commercial fusion. Shopify CEO Tobi Lütke’s Thistledown Capital and Saudi JIMCO were among investors that backed the round. The lifeline for Canada’s sole fusion company comes as investors injected US$2.6 billion over the past year across 52 other companies globally, including 29 in the U.S. alone. And the race to crack the fusion tech code is heating up: China National Nuclear Corp. set up a $2-billion China Fusion Energy Co. in July, followed soon by Massachusetts-based Commonwealth Fusion Systems, the world’s largest private fusion company, raising US$863 million in a new round.

➔ Carbon capture is like trapping a genie in a bottle—but it could escape. A new peer-reviewed study published in Nature estimates that the world can trap a mere 1,460 gigatons of carbon dioxide-compared to previous estimates of as much as 40,000 Gt (roughly a year’s worth of CO2). Structural geological faults and poor well construction could dampen the efficacy of carbon-capture tech, the study notes. That still leaves plenty of jurisdictions with viable geology and expertise to capture carbon. Around US$4 billion has already been invested in carbon capture, utilization and storage (CCUS) facilities in 2024 with more than 50 metric tonnes of CO2 capture capacity currently operational—with few leaks reported so far. In addition, the report identifies Canada and the U.S. as “better placed” than Europe to implement geologic storage solutions.

Nurturing nature in New York

Power On: Hard choices, real consequences. Sounds about right as the theme of this year’s New York Climate Week starting September 22. The event, which is fast rivalling the annual COP events, brings financiers, environmentalists and policy wonks together in one of the Big Apple’s worst traffic jam seasons.

Lisa Ashton, our Director of Agriculture Policy, will be in attendance. She will be speaking at the Nature Hub on September 24^th at an event co-hosted by the RBC Climate Action Institute and Nature United.

Nature contributes US$33 trillion to the global economy—equivalent to the value of global trade in goods and services. Yet, nature’s role in the economy beyond its extracted resources—fish, grain, and timber—are not accounted for in national GDPs, leaving a source of economic growth and risk on the sidelines. Here’s a sneak peak of some early themes emerging in Lisa’s upcoming report on the nature economy:

• Natural capital is underutilized as an asset in economic growth. The GDP of Canada’s nature-dependent sectors grew 0.6% slower, year-over-year, compared to the rest of the economy over the past quarter century.

• There are real risks in overlooking nature’s role in building prosperity. Canada, the U.S., and the U.K. are looking to build back their economies. Yet, their nature base is depleting. The U.K., for example, is stressing its water assets, with the government projecting a 5- billion-litre-per-day gap in water availability by 2055.

• Pro-growth agendas present opportunities to value and build natural capital. Nature is now a reportable risk and an investable asset class—ready to be integrated into major investment and infrastructure projects.

“In an era of reindustrialization, all opportunities for durable growth need to be on the table. A timely consideration as countries around the world are struggling to raise capital to manage, protect, and conserve their natural capital,” says Lisa.

RBC Briefings

• Carbon Pricing & Competitiveness: Steering Canada’s climate policies amid trade shocks

• Emissions, energy & economics: Canada’s latest mega project

• Building the Future: What to watch as Build Canada Homes takes shape