The Pathways Alliance's proposed $16.5-billion carbon capture project in Alberta's oil sands, critical for Prime Minister Mark Carney's support for new fossil-fuel infrastructure, faces significant financial obstacles. Despite federal and provincial subsidies, the project is stalled due to high operational costs and uncertainty in the carbon credit market, with the Canada Growth Fund unwilling to assume the high revenue risk sought by Pathways.
Carney tied carbon capture to new pipelines. Here’s how it could finally get built
Business
AI Summary
TL;DR: Key points with love ❤️The Pathways Alliance's proposed $16.5-billion carbon capture project in Alberta's oil sands, critical for Prime Minister Mark Carney's support for new fossil-fuel infrastructure, faces significant financial obstacles. Despite federal and provincial subsidies, the project is stalled due to high operational costs and uncertainty in the carbon credit market, with the Canada Growth Fund unwilling to assume the high revenue risk sought by Pathways.
Trending- 1 2023: The Canada Growth Fund (CGF) is launched.
- 2 Late last year: Talks between Ottawa and the Pathways Alliance regarding the carbon capture project stalled.
- 3 Recently: Alberta Premier Danielle Smith freezes the provincial carbon price, adding to market uncertainty.
- 4 Recently: Canadian Natural Resources Ltd. submits 61 applications on behalf of Pathways for regulatory approvals.
- 5 Last month: Natural Resources Minister Tim Hodgson identifies linking carbon markets as a priority.
- 6 2025-06-21: The Globe and Mail publishes an article detailing the ongoing challenges and potential solutions for the Pathways project.
- Continued impasse on a major emissions-reduction project, hindering Canada's climate goals.
- Uncertainty for oil-sands producers regarding the future of the carbon credit market and regulatory environment.
- Challenges for the federal government in balancing resource sector growth with sustainability commitments.
- Potential need for new forms of cooperation and risk-sharing between federal and Alberta governments to advance the project.
What: The stalled progress of the Pathways Alliance's large-scale carbon capture project in Alberta's oil sands, despite its strategic importance to Canada's energy and climate goals.
When: Talks between Ottawa and Pathways stalled late last year. The Canada Growth Fund was launched in 2023. The article was published on June 21, 2025.
Where: Alberta, Canada, specifically the oil sands region and near Cold Lake.
Why: The primary barrier is financial: high operational costs and an unwillingness from both government and industry to bear the significant revenue risk associated with the uncertain carbon credit market. Alberta's recent freeze on its provincial carbon price further exacerbates this uncertainty.
How: The Pathways Alliance proposes a 400-kilometer pipeline to transport captured CO2 to an underground hub. While capital costs are partially covered by federal and provincial subsidies, the operational costs and the lack of guaranteed revenue from carbon credits remain unresolved. The Canada Growth Fund, designated to provide carbon contracts for differences, has deemed the level of risk sought by Pathways inconsistent with its mandate.