What projects qualify

A CCUS project is a project intended to support a CCUS process through any of the following:

Qualified CCUS projects

To be considered a qualified CCUS project, the project must meet the following conditions:

Based on the project’s most recent project plan, it is expected to support the capture of CO₂ in Canada for a period that is at least equal to the total CCUS project review period for the project (approximately 20 calendar years)
- For example, a pilot or demonstration project that would operate temporarily would not be considered a qualified CCUS project
Based on the project’s most recent project plan, its projected eligible use percentage equals or exceeds 10% in each of the following periods:
- If the first project period begins after September of a calendar year, the period beginning on the first day of commercial operations and ending on December 31 of the following calendar year
- Each calendar year of the project’s total CCUS project review period, other than a period that includes a year referred to in the previous bullet
An initial project evaluation must have been issued for the project

To be considered a qualified CCUS project, the project cannot be:

Operated to service a unit for which the commissioning date was on or before April 7, 2022, and undertaken for the purpose of complying with emission standards that apply, or will apply, under the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations

What expenditures qualify

There are 4 categories of qualified CCUS expenditures.

Qualified carbon capture expenditures

These are eligible in proportion to the quantity of captured CO₂ the project is expected to support for storage or use in eligible uses
Qualified carbon transportation expenditures

These are eligible in proportion to the quantity of captured CO₂ the project is expected to support for storage or use in eligible uses
Qualified carbon use expenditures

These are eligible only if they are expenditures to acquire property that is expected to be used to support the use of captured carbon solely to produce concrete in Canada or the United States using a qualified concrete storage process
Qualified carbon storage expenditures

These are eligible only if they are expenditures to acquire property that is expected to support storage of captured carbon solely in dedicated geological storage

To be eligible for the CCUS ITC, qualified CCUS expenditures must be:

For a qualified CCUS project
Incurred to acquire property described in capital cost allowance Class 57 or Class 58, or as described in the definition of dual-use equipment

For descriptions and rates for CCA classes 57 or 58, refer to: Capital cost allowance (CCA) classes