Canada’s oilsands sector scales back ambitious carbon capture promises amid policy shifts

Canada’s largest oilsands producers have quietly scaled back the ambition of their flagship emissions plan, trimming a long-promised carbon capture target by more than three-quarters as Ottawa and Alberta move to advance a new phase of support for the sector.

The industry group now known as the Oil Sands Alliance, previously the Pathways Alliance, first came together in 2021 with a bold claim: its member companies would help deliver net-zero oilsands operations by 2050, anchored by a carbon capture and storage system designed to cut 68 megatonnes of emissions a year. That figure featured prominently in advertising, public statements and lobbying efforts aimed at governments in Ottawa and Edmonton.

But in a memorandum of understanding finalised in May between the federal and Alberta governments, the shared objective for the project has been reset to 16 megatonnes a year by 2045, starting with six megatonnes when the system is expected to come online in 2035. The reduction amounts to about 77 per cent from the original promise.

The change matters because the oilsands remain one of Canada’s biggest sources of greenhouse gases. The sector emits roughly 90 megatonnes a year, or close to a third of Alberta’s total. Even after years of promotion, the province has only about 15 megatonnes of cumulative carbon capture since 2004 from existing projects, which works out to little more than one megatonne a year.

The alliance’s original plan envisaged a vast CO₂ transport and storage network linked to multiple oilsands facilities, with a pipeline running roughly 650 kilometres to a storage hub in the Cold Lake region. Captured carbon would be injected deep underground into the Basal Cambrian Sandstone formation, where porous rock and cap rock layers are meant to trap it permanently. The alliance says carbon capture and storage can reduce emissions intensity from oilsands production and create infrastructure that could be used by other heavy industries.

Yet critics have long questioned whether the alliance’s public messaging matched the substance of its plan. Patrick McCurdy, a communications professor at the University of Ottawa who has studied the group’s climate claims, co-authored a 2023 paper that concluded there were “numerous indicators of greenwashing” in the alliance’s communications. The paper said its messaging omitted important context, relied on misleading framing and did not meet the standards expected of a credible net-zero pathway.

McCurdy argues the revisions are part of a broader pattern in which oil companies set out sweeping promises, then revise the details once political conditions change. He says the companies are highly effective at shaping public debate and building the social licence they need to continue expanding production.

The federal Competition Act’s anti-greenwashing provisions were originally designed to curb this kind of conduct, particularly claims that firms were on track for net zero without evidence of meaningful emissions cuts. But those provisions were later rolled back under the Carney government, and the alliance removed many environmental claims from its website.

The latest agreement between Ottawa and Alberta also reflects a wider shift in policy. Both governments have advanced carbon capture tax credits, relaxed some environmental rules, and moved to speed approvals for major industrial projects. They have also agreed to push for a new pipeline to the West Coast, despite the absence of a company willing to build it.

In its response to questions, the Privy Council Office pointed to the role of carbon capture in balancing economic growth and emissions reduction. Pierre Cuguen, a spokesperson, said existing projects in Canada show the technology can work in real-world conditions and said the oilsands project would still be subject to detailed design work, regulatory review and investment decisions.

Sean McCoy, an engineering professor at the University of Calgary who specialises in carbon capture, said the sharp reduction in the target is not the result of any major change in scientific understanding. In his view, most of what is known about capturing carbon dioxide was already known when the original pledge was made in 2021. He suggested the main issue may be cost, with scope often shrinking as budgets tighten.

Even so, McCoy said the revised target is still enormous by global standards. A project capable of capturing 16 megatonnes a year would be the largest carbon capture and utilisation scheme ever built. He said the challenge lies in scale: the emissions cannot be captured from a single stack, but from a sprawling industrial system spread across multiple facilities.

The cost remains uncertain, though estimates have placed the project above $20 billion. Imperial Oil’s former chief executive previously said the alliance wanted governments to cover about 75 per cent of the bill, much of it through new tax credits.

The alliance has also softened its messaging. Earlier campaigns stressed net zero and deep emissions cuts; more recently, the tone has become more defensive, with Cenovus chief executive Jon McKenzie telling investors in May that debate over oilsands development had become “myopically focused on the climate agenda”, according to Canadian Press.

For McCurdy, that shift does not represent a new direction so much as a recalibration of a long-running strategy. The promise of transformational carbon capture, he said, has always been presented as a solution waiting just around the corner. In practice, the goal appears to have moved as the politics around it changed.