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Canada Has an Opportunity to Become a Global Leader in Carbon Dioxide Removal

Sustainable Finance Energy Transition December 08, 2023
Sustainable Finance Energy Transition December 08, 2023
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The race is on to reduce greenhouse gas emissions worldwide, but stakeholders need to focus in parallel on scaling the carbon removal industry to transition to a net zero world. While the attention must remain on cutting emissions, the world will need innovation and scaling in carbon removal methods to reach net zero by 2050 and to remove CO2 concentration in the atmosphere. 

Reaching net zero is an ongoing challenge. For Canada to hit its emissions reduction target, it will require creative approaches to reducing emissions and fostering collaboration between multiple sectors. Efforts are accelerating across all industries and solutions are multiplying. However, even after all reductions have been implemented, hard-to-abate emissions will remain. The “net” of net zero will require removal of carbon to offset those hard-to-abate emissions. Canada needs to innovate and scale these carbon removal solutions, fast. Carbon dioxide removal (CDR) is the process of using novel technologies to scrub existing carbon dioxide from the atmosphere and the oceans and storing it permanently. 

The methods used in this process, as well as its scalability, were the focus of Carbon Removal Canada’s recent launch event in Ottawa. Carbon Removal Canada is an independent policy initiative aimed at a rapid and responsible scaling of CDR in the country, with the ultimate goal of positioning Canada as a world leader in carbon dioxide removal.

The launch, which featured a panel discussion about CDR scalability and Canada’s role as a potential global leader in the sector, was moderated by Carbon Removal Canada’s Executive Director, Na’im Merchant. Panelists included Grégoire Baillargeon, President of BMO Financial Group, Quebec and Vice Chair of BMO Capital Markets, Sharleen Gale, Chief of Fort Nelson First Nation and Chair of the First Nations Major Projects Coalition, Stacy Kauk, Head of Sustainability at Shopify, and Mike Kelland, CEO of Planetary Technologies.

No Single Fix

The battle to lower emissions is being fought on several fronts, including electrification and the broader energy transition, but BMO’s Grégoire Baillargeon, made it clear that stakeholders need to develop CDR solutions in parallel. “Priority must remain emissions reductions, but it is absolutely necessary that we start scaling CDR industries now. We need time to innovate and scale any new industry. The IPCC is clear, there is no path to net zero without CDR. CDR is essential for net zero and it's the only way to reduce CO2 concentration in the atmosphere. We need to invest now to get to our destination” he said. 

Baillargeon pointed to the abundance of clean energy Canada enjoys from hydro and other sources, explaining that the challenge is making sure we use our renewable power wisely when it is needed to decarbonize our daily activities and our industries. “The issue of scaling the energy intensive CDR sector is that clean energy is actually required for emissions reductions elsewhere. This is very, very difficult but we can do it, wisely,” he said. 

Catalyzing Change

Still, Baillargeon said the country is in an enviable position to capitalize on its renewable energy sources, particularly in Eastern Canada, and its gas sector expertise, particularly in Western Canada. “We can actually be at the forefront of research,” he said. “If we really play it as a country, if we play it together, we can really advance research on both capture innovation and the sequestration methods.”

The investments needed to help Canada become a world leader in CDR is a massive economic opportunity, creating jobs and contributing to GDP growth, he explained.

BMO, for its part, is trying to help catalyze that change, starting in 2021 with the formation of the BMO Climate Institute to partner with clients in their own energy transitions and by providing capital for those solutions. BMO expanded this work again in 2022 by acquiring Radicle, a leading carbon advisory firm active in the carbon markets. 

Baillargeon said BMO’s investment in Radicle demonstrates that BMO is mobilizing to be able to generate and trade the carbon credits from CDR thereby accelerating the deployment of this new industry, as it has done with countless new sectors since its foundation as Canada’s first bank 206 years ago.

Moving Forward, Together 

One crucial element to success for scaling up CDR technologies is incorporating economic reconciliation with Indigenous communities, Chief Sharleen Gale pointed out – an issue that Baillargeon echoed. 

“We cannot repeat the mistakes of the past,” Baillargeon said. “Think about bringing Indigenous nations together in this whole new field where we develop knowledge together and we understand the safety, the needs, the economic opportunities so that we not only invest together, but we collaborate to create a future that fixes some of the issues of the past.”

Baillargeon suggested two other elements that are essential for Canada to move forward and embrace CDR. The first is the issue of safety in sequestration and transport and the second is the way CDR is positioned – not as a solution to carry on business as usual, but rather as a tool used in addition to emissions reductions. These must remain at the top of the priority list for the sector to become all it can be, with all its benefits for Canada and for the planet. 

He went on to tout Canada’s advantages in the sector, with its vast resources and knowledge – not just in clean energy, but in how best to handle emissions from an engineering perspective. Scaling up CDR will require experts in both of these sectors, and there are thousands of people available with the right skill sets.

“We have the knowledge, we have the energy as a country to really move the research forward and create an advantage,” Baillargeon noted. “We just need to come together and seize the advantage.”

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Grégoire Baillargeon President, BMO Financial Group, Quebec

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