‘Hidden subsidy’ made project appear profitable

Shell’s carbon capture project sold 200M of phantom’ emissions credits

- MARCO CHOWN OVED

Shell's Quest carbon capture and storage facility in Fort Saskatchewan, Alta. A new report from Greenpeace calls into question the economic viability of the oil industry's preferred way to reduce its emissions.

Only days after a planned carbon capture project near Edmonton was cancelled for being too expensive to operate, a new report shows that Alberta's longest-running carbon capture project was only able to turn a profit because it received a favourable deal from the province, calling into question the economic viability of the oil industry's preferred way to reduce its emissions.

Shell's Quest carbon capture and storage (CCUS) project, which has been operational since 2015, has received $777 million in subsidies from the federal and provincial governments and $406 million from selling carbon credits.

Documents obtained by Greenpeace via freedom-of-information legislation reveal that half of those carbon credits were for carbon that was never captured because the Alberta government granted the facility two tons of carbon credits for every ton sequestered underground.

That two-for-one deal, the report states, allowed Shell to to double the amount of money it made selling credits, adding more than $200 million from selling "phantom" credits for captured carbon that was actually emitted into the atmosphere.