Department of Finance Canada discussed plans to open both tax credits to systems that utilize waste biomass in its 2023 Fall Economic Statement, a document that introduces a series of new measures to advance the government’s economic plan to strengthen the economy, flight climate changes and create jobs.
In its announcement, the agency said it is proposing to expand eligibility for the 30 percent Clean Technology Investment Tax Credit to include systems that produce electricity, heat, or both electricity and heat from waste biomass. The expanded credit would be available to businesses investing in eligible property that is acquired and becomes available for use on or after the date of the 2023 Fall Economic Statement.
Department of Finance Canada is also proposing to expand eligibility for the 15 percent Clean Electricity Investment Tax Credit to include systems that produce electricity or both electricity and heat from waste biomass, which would be available as of the date of Budget 2024 for projects that did not begin construction before March 28, 2023.
Drax Group plc released a statement on Nov. 24 commending the Government of Canada on the inclusion of biomass-using technologies for both tax credits, calling biomass a key component of the clean energy sector with the potential to reduce reliance on diesel fuel in rural and remote communities.
“We are encouraged by the Canadian government’s commitment to clean energy and the recognition of biomass-used technologies as a crucial component in achieving a cleaner future,” said Will Gardiner, CEO of Drax. “Leading climate bodies and scientists agree that biomass has an important role to play in climate mitigation – as a sustainable feedstock, as a renewable energy resource, and as a carbon removals technology through bioenergy with carbon capture and storage (BECCS).”
“Working on both sides of the Atlantic, Drax is focused on enabling a zero-carbon, lower-cost energy future,” said Gardiner. “Drax’s ambition is to be the world’s leading provider of carbon removals through BECCS.”
With the right policy framework, and further announcements such as the one in the FES, Drax said it believes that Canada could be an ideal location to deploy BECCS, given its access to one of the world’s greatest fiber baskets, well-established sustainable forestry sector, and suitable geology for CO2 storage.
“Supporting BECCS deployment in Canada would kick start a whole new sector of the economy, creating green growth on an even greater scale, creating additional jobs, and investing in rural economies unlike what we have previously seen,” said Gardiner.
In Canada, Drax has invested over $830 million in the Canadian forestry sector, supporting more than 10,000 jobs and contributing $1.1 billion to the nation’s GDP in 2021.
Drax looks forward to working closely with the Canadian government to advance the biomass industry further and create opportunities for forest workers, including through meaningful partnerships with First Nations communities and businesses.
A full copy of Department of Finance Canada’s announcement is available on the country’s website.
