Supreme Court ruling upholding Canada’s carbon tax opens door to explosion of startups
Last week, the Supreme Court of Canada ruled that the national government’s plan to tax carbon emissions was legal in a decision that could have significant implications for climate-focused start-ups across the country.
The ruling ended about two years of legal challenges and could set the stage for an explosion in funding and commercial support for Canadian start-ups developing technologies to reduce greenhouse gas emissions, according to investors and contractors representing some of the world’s largest utilities. petrochemical companies.
“The high price of carbon has the potential to make Canada a powerhouse for the scaling up of revolutionary decarbonization technologies and for the deployment of solutions such as carbon capture, industrial electrification and electrolysis. hydrogen, âsaid an investor who works with a fund that supports startups on behalf of large energy companies.
This 2018 Greenhouse Gas Pricing Act is the cornerstone of Canadian climate policy implemented by Prime Minister Justin Trudeau. It sets minimum price standards that all provinces must meet, but gives provinces the flexibility to set higher prices. So far, seven of the country’s 13 provinces are currently paying the âbackstopâ rate set by the national government.
This price is C $ 30 per tonne of carbon dioxide released, but is expected to rise to C $ 170 per tonne by 2030. This figure is just a little higher than the current prices Californians are charging under the state carbon pricing plan and about four times the carbon price set by the Northeastern Regional Greenhouse Gas Initiative.
Image credits: Gencho Petkov (Opens in a new window) / Shutterstock (Opens in a new window)
Under the plan, much of the money raised through the tax levied by the Canadian government would be used to support projects and technologies that reduce greenhouse gas emissions or create more sustainable approaches to l ‘industry.
“Climate change is real. It is caused by greenhouse gas emissions resulting from human activities, and it poses a serious threat to the future of humanity,” Chief Justice Richard Wagner wrote at the name of the majority, in the Supreme Court decision.
Three provinces – Alberta, Ontario and Saskatchewan challenged the legality of the greenhouse gas policy, and the Alberta challenge was allowed to go to the High Court – delaying the implementation. national pricing system work.
Once the barriers are removed, entrepreneurs and investors around the world expect the carbon agenda to quickly boost the prospects of Canadian startups.
âThis represents underlying government support and a huge amount of money. If you wanted macroeconomic support for an underlying shift in sectoral developments that could justify and support tech companies working on climate change mitigation, what could be better then when the government told you we care about this? this and the money is free? âsaid BeZero Carbon founder Tommy Ricketts. “There could not be a better condition for startups in Canada.”
Companies that will directly benefit from a carbon tax in Canada include companies like Kanin Energy, which is developing decarbonization projects, including waste heat to electricity; CERT, which currently competes in Xprize Carbon and is working on a way to convert carbon dioxide to ethylene; and SeeO2, a company also working on carbon dioxide conversion technologies.
Geothermal technologies like Quaise and Eavor could also see a boost, as could companies that focus on electrifying the transportation industry in Canada.
Further afield are companies like Planetary Hydrogen, which combines hydrogen production and carbon capture in a way that also helps de-acidify the oceans.
“Think gasoline at the pump. It’s going to be charged extra,” said an investor who works for the venture capital arm of one of the world’s largest oil and gas companies, who was not licensed. to talk to the press. âFor cleaner energy, the price will certainly be reduced. And think about where this tax is going. Most of the tax will go to government funding for clean tech or climate tech companies. So you have a double blow. boost for carbon startups. footprint reduction zone. “
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