A long-awaited carbon pricing agreement between the federal government and Alberta is nearing completion, with a target of $130 per tonne by 2040 for industrial emissions. The deal, expected to be announced before the end of this week, marks a pivotal alignment on climate policy between Ottawa and the province.
Under the terms, Alberta’s effective carbon price will climb from $95 per tonne to $100 per tonne in 2027, holding steady until 2030. After that, annual increases of $3 per tonne will push the rate to the $130 benchmark by 2040, a slower trajectory than the national plan that initially aimed for $170 per tonne by the end of this decade.
Prime Minister Mark Carney is slated to join Alberta Premier Danielle Smith in the province on Friday, May 15, for a joint statement on the accord. While the framework is largely set, two to three sticking points remain unresolved, casting a slight shadow over the finalization.
The agreement ties into broader initiatives, including the Pathways Plus carbon capture, utilization, and storage project, which builds on a memorandum of understanding signed in November last year. It also aligns with Alberta’s Technology Innovation and Emissions Reduction Regulation, known as TIER, which governs heavy emitters in the province.
Energy sector stakeholders have underscored the importance of this clarity. A predictable carbon pricing structure is seen as a critical signal to investors, particularly for capital-intensive projects aimed at curbing emissions.
Alberta officials were also expected to join a virtual federal cabinet meeting to iron out details. With the announcement looming, the finalized price of $130 per tonne by 2040 stands as a concrete target for industry planning.
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