Based on reports that the federal government will announce a deal where Alberta’s effective industrial carbon price reaches $130 as late as 2040, we modeled three emissions scenarios.
The delay in reaching $130, and the delay in the construction of the Pathways carbon capture project this causes, while also increasing production to fill new export capacity, leads to an additional 230 MtCO2e by 2040 compared to a no-pipeline scenario where Pathways is built by 2030.
- Current Measures scenario + Pathways 2030: We use the Canada Energy Regulator’s Current Measures outlook and assume the carbon price rises to $170/t on the original timeline by 2030, enabling Pathways to proceed in 2030.
- Pipeline Scenario + Pathways 2030: we add 1,000 kb/d of pipeline egress between 2030 and 2034, while maintaining the same carbon price trajectory and project timing.
- Pipeline scenario + Pathways 2040: we pair additional pipeline capacity with a weaker carbon price, reaching $130/t by 2040, delaying the Pathways project to 2040.
This second chart shows the reported schedule to ramp Alberta’s effective TIER credit price up to $130 by 2040. The original planned $170 is shown for reference. When adjusted for inflation, we can see the effective price is stalled, which makes it unlikely to spur investment in decarbonization.
