{"id":7494,"date":"2026-07-16T13:48:54","date_gmt":"2026-07-16T13:48:54","guid":{"rendered":"https:\/\/www.rbc.com\/en\/thought-leadership\/?p=7494"},"modified":"2026-07-16T14:13:20","modified_gmt":"2026-07-16T14:13:20","slug":"canadas-great-energy-and-carbon-capture-rush","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/climate-action\/canadas-great-energy-and-carbon-capture-rush\/","title":{"rendered":"Climate Crunch: Canada\u2019s great energy\u2014and carbon capture\u2014rush"},"content":{"rendered":"\n\n\t\t\t
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\n\t\t\t\t\n\t\t\tClimate Action\t\t<\/a>\n\t\t\n\t\t
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\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\tClimate Crunch: Canada\u2019s great energy\u2014and carbon capture\u2014rush\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t<\/h2>\n\t\t\t\n\t\t\t\t\t\t

\n\t\t\t\tThe new Calgary Stampede for Canadian resources\t\t\t<\/p>\n\t\t\t\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

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\u2794 How the proposed West Coast pipeline and Pathways project impact emissions<\/strong><\/p>\n\n\n\n

\u2794 Six energy transition trends triggered by conflicts<\/strong><\/p>\n\n\n\n

\u2794 Tired energy batteries get a new lease on life<\/strong><\/p>\n<\/div>\n<\/section>\n\n\n\n

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Signals<\/h2>\n\n\n\n

Canada\u2019s zero plastic waste agenda is a U.S. target.<\/strong> Lost in the flurry of blocked bridges and wider CUSMA uncertainty, zero plastic is another of Washington\u2019s trade grievances<\/a> against Canada. Will Ottawa be forced to backtrack on the program? It\u2019s making a dent: Since the ban began<\/a> in 2018, the Canadian shoreline cleanups have reported declines in targeted items (60% reduction in straws<\/a>, 25% fewer bags), while microplastics in Great Lakes water have plummeted since the microbead ban, experts told a Senate Committee recently.<\/p>\n\n\n\n

Global sustainable debt issuance hit a five-year high.<\/strong> Issuance reached nearly US$1 trillion in the first five months of 2026. Still, at US$216 billion issued in May, it only accounted for 4.6% of total global debt offerings in the month. Green and sustainability bonds and securitized social debt accounted for over three quarters of the issuance, according to Bloomberg New Energy Finance. Canada issued only 0.7% the global market from its 2022 highs when it captured 3.1% of issuance.<\/p>\n\n\n\n

\"Global<\/figure>\n\n\n\n

Retired electric vehicle batteries are getting a second life.<\/strong> Vancouver-based Moment Energy<\/a> started what it describes as the world’s largest battery repurposing facility, converting retired EV batteries into stationary energy storage systems, with a target of one gigawatt-hour of production by 2030. Backed by Canadian and U.S. governments, the Amazon Climate Pledge Fund, and others, Moment aims to utilize the first generation of EV batteries that are set retire. While they may not have the juice to meet exacting automotive performance standards, they can be repurposed for grid storage.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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The new Calgary Stampede for Canadian energy<\/h2>\n\n\n\n

A federal and Alberta-backed West Coast pipeline, an Alberta-Ontario Northern Shield corridor, Ottawa\u2019s support for B.C. LNG\u2014it seems to be a stampede for energy in recent days.<\/p>\n\n\n\n

Then came Canada\u2019s big action on climate change: five major oilsands firms agreed with the Alberta province and federal government to build the long-planned Pathways carbon capture and storage (CCS) project.<\/p>\n\n\n\n

The developments could set the pace on emissions in the country, and be a leading indicator for how the slew of other major projects would require Canadian policymakers to balance economic development with their stated climate ambitions.<\/p>\n\n\n\n

Energy Policy Lead Shaz Merwat<\/strong> examines the Pathways memorandum between the companies, Alberta and the federal government:<\/p>\n\n\n\n

It was a one-two punch.<\/strong> Days before the Pathways announcement was the Alberta-to-B.C. West Coast Oil Pipeline (WCOP), to move up to a million barrels a day to the Pacific coast. But the same policy package that fast-tracked the pipeline is built upon the withdrawal of marquee federal tools that had been setting the timeline on oilsands emissions, most notably the proposed oil and gas emissions cap. What Ottawa kept was the funding: the 50% federal carbon capture, storage and utilization (CCUS) investment tax credit, stacked with Alberta\u2019s incremental support. The \u201cstick\u201d was withdrawn, but the \u201ccarrot\u201d stayed.<\/p>\n\n\n\n

There appears to be an emissions file reset.<\/strong> The market-oriented federal government has stopped using regulatory timelines to force the pace and left the pace to the market\u2014and to Alberta. Prime Minister Mark Carney has been unusually direct about the near-term costs: the changes, he said, will mean emissions would be \u201chigher<\/a> in the next few years than they were projected to be under the previous government\u2019s plan,\u201d calling the plan he inherited \u201ctoo expensive\u201d and \u201ctoo divisive.\u201d In effect, Carney rebooted the emissions file.<\/p>\n\n\n\n

Pathways is the first project proposed under the rebooted climate regime.<\/strong> Five oilsands majors\u2014operating as the Oil Sands Alliance\u2014agreed to advance a scaled-back version of the Pathways carbon-capture project, with binding terms still to come. The commitments have been resized from what the alliance originally promised in 2021 (see table).<\/p>\n\n\n\n

Oilsands Alliance’s Emissions Reduction Commitments<\/strong><\/p>\n\n\n\n
<\/th>Original<\/th>Revised<\/th>Revised % of original<\/th><\/tr><\/thead>
Initial Phase \/ Phase 1<\/strong><\/td><\/td><\/td><\/td><\/tr>
Total emissions reductions<\/td>22 MT<\/td>6 MT<\/td>16 MT less<\/td><\/tr>
Emissions reductions, CCS project<\/td>10-12 MT<\/td>6 MT<\/td>4-6 MT less<\/td><\/tr>
Emissions reductions deadline<\/td>2030<\/td>2035<\/td>+ 5 years<\/td><\/tr>
<\/td><\/td><\/td><\/td><\/tr>
Additional Phases \/ Phase 2-3<\/strong><\/td><\/td><\/td><\/td><\/tr>
Total emissions reductions<\/td>46 MT<\/td>10 MT<\/td>36 MT less<\/td><\/tr>
Emissions reductions, CCS project<\/td>28-30 MT<\/td>Undisclosed<\/td>18-30 MT less<\/td><\/tr>
Emissions reductions deadline<\/td>2050<\/td>2045<\/td>– 5 years<\/td><\/tr>
<\/td><\/td><\/td><\/td><\/tr>
All Phases \/ Phases 1-3<\/strong><\/td><\/td><\/td><\/td><\/tr>
Total emissions reductions<\/td>68 MT<\/td>16 MT<\/td>52 MT less<\/td><\/tr>
Emissions reductions, CCS project<\/td>40 MT<\/td>Min. 6 MT<\/td>24-34 MT less<\/td><\/tr>
Emissions reductions deadline<\/td>2050<\/td>2045<\/td>– 5 years<\/td><\/tr><\/tbody><\/table>\n\n\n\n

Source: Oilsands Alliance, RBC Capital Markets, RBC Climate Action Institute<\/em><\/p>\n\n\n\n

The alliance\u2019s total reduction commitment is now 16 metric tonnes (Mt) annually by 2045, against an original plan of roughly 68 Mt\u2014and the original figure was always the narrow one, covering operational (Scope 1 and 2) emissions only, not the far larger volume released when the barrel is burned (Scope 3). Set against oilsands emissions of roughly 90 Mt per year, a 16 Mt commitment leaves most of the sector\u2019s footprint outside any quantified plan.<\/p>\n\n\n\n

Climate is a square peg for a round hole.<\/strong> The November Canada\u2013Alberta MOU named its own objective as achieving net-zero emissions by 2050 while unlocking the growth of Alberta\u2019s oil and gas\u2014including the pipeline. So, the deal simultaneously declares a 2050 destination, enables higher near-term production and emissions, and resizes the sector\u2019s flagship abatement project down by more than three-quarters\u2014without publicly reconciling the three.<\/p>\n\n\n\n

Canada\u2019s 2050 net-zero goal remains intact. <\/strong>Net-zero-by-2050 remains legislated federally. Alberta still holds a 2050 goal, now worded as a carbon-neutral economy. The MoU keeps the ambition, even though it remains unclear at the company level.<\/p>\n\n\n\n

So, is this bad for the climate?<\/strong> It depends on what you count as progress. The pipeline adds an estimated 15.5\u201318.2 Mt a year upstream through 2030 if it drives new output; offsets from rail-to-pipeline switching and displacing higher-emissions Asian crude bring the net closer to 10\u201312 Mt. The alliance\u2019s 16 Mt nominally covers that\u2014but nominally<\/em> is working hard: the pipeline emissions are nearer-term (still likely 6-7 years away). The 16 Mt is an almost 20-year target in 2045 with no accompanying published bridge to net-zero by 2050. Under the old regime, progress meant distance to a target on a regulatory clock. Under the new one, the target stays on the books, but the clock belongs to the market, and the flagship project is sized to what\u2019s deliverable now, not what 2050 requires. Whether that\u2019s a slower road to the same place or a quiet exit remains unanswered. That ambiguity, more than any other number, is what\u2019s new.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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How the Ukraine war accelerated EU\u2019s energy transition<\/h2>\n\n\n\n

Global emissions from the energy sector rose 1.1% in 2025, with the U.S. accounting for more than a third of the rise, according to the Energy Institute\u2019s Statistical Review of World Energy<\/a>, now in its 75th<\/sup> edition. Once published by BP Plc, it\u2019s now published by the non-profit Energy Institute in partnership with consultants Ember, Kearney and KPMG.<\/p>\n\n\n\n

The big takeaway: there is fragmentation of climate policies around the world, but renewable energy deployment is also accelerating at a scale that is reshaping entire energy systems.<\/p>\n\n\n\n

Some key highlights from the report that speak to wider trends:<\/p>\n\n\n\n