Canada’s chemical trade group CIAC proposes review of industrial carbon pricing

TORONTO (ICIS)–In light of the ongoing trade and tariffs tensions, Canada may want to review its industrial carbon pricing rules, trade group Chemistry Industry Association of Canada (CIAC) said.

“With ongoing changes and uncertainty in trade and tariffs, now is a good time to review industrial carbon pricing – especially for energy-intensive and trade-exposed industries – to ensure the current pricing levels and rules are still the right fit,” the group said in a statement to ICIS.

However, CIAC made clear that it and its members support industrial carbon pricing as a tool to encourage companies to reduce emissions in a cost-effective way.

“[Carbon pricing] sends investment signals that help businesses make decisions about lowering their carbon footprint,” it said.

If a future federal government should decide to remove the federal carbon pricing system, it should work closely with provincial governments and industry to prevent disruptions, the group said.

ICIS had asked CIAC to comment on an announcement this week by Canada’s opposition Conservatives that they would, if they win the next election, abolish the country’s federal industrial carbon pricing, along with the federal consumer carbon tax.

Federal industrial carbon pricing, known as an “Output-Based Pricing System” (OBPS), sets minimum standards for provincial industrial emissions systems, and it applies directly in provinces that do not have their own system.

Canada’s chemical industry has been subject to carbon pricing policies for years.

Alberta introduced an industrial carbon price in 2007, and a national carbon price has been in place since 2019, CIAC noted.

Industrial carbon pricing is seen as key in attracting investments in low-carbon projects, such as Dow’s Path2Zero petrochemicals complex under construction in Alberta.

Canada’s new prime minister, Mark Carney, has suspended the federal consumer carbon tax but said the government would retain and improve federal industrial carbon pricing as the most effective measure to control emissions.

Carney, who last week took over from Justin Trudeau, is expected to call an election on Sunday (23 March), which will likely be held on 28 April or 5 May, public broadcaster CBC reported on Thursday, citing unnamed government sources.

After Trudeau’s resignation announcement on 6 January and amid the intensifying tariff threat from the US, Carney’s Liberals quickly caught up with the Conservatives in opinion polls about the elections, with both parties now running neck and neck.

Thumbnail photo source: International Energy Agency