The economic chaos caused by United States President Donald Trump’s “on again, off again” tariff campaign is the main trigger behind both fuel-price lowering, but not the only factor.

The carbon program was one of the most hated of federal Liberal government’s policies and the party’s new leader, Mark Carney, likely would have dropped it to gain support during the election anyway, but it became a priority once Trump slammed the Canadian economy with tariffs.

Carney dropped the consumer part of the carbon tax, which led to lower prices at the pumps.

Gasbuddy.com said the Canadian national average retail gasoline price dropped to $1.33 per litre from $1.54 immediately before the announcement.

Saskatchewan went further, dropping the industrial carbon tax, which should moderate the cost of electricity in the province.

The carbon tax was not charged on fuel used in the field but it did apply to many other agricultural activities, including hauling grain and fertilizer and producing nitrogen fertilizer.

Fuel costs could moderate further as the price of the raw material, crude oil, has also declined.

West Texas Intermediate May futures fluctuated wildly last week, at one point dropping to US$55 per barrel, but closed April 11 at US$61.50, down from the highs in mid January of about US$75.

A year ago at this time WTI crude was also around US$75 per barrel.

The biggest part of that price drop happened in the days after Trump announced tariffs on most of the world on April 2, leading to worries that the disruption could push many major economies into recession.

Further pressuring prices was the announcement from the Organization of Petroleum Exporting Countries and its allies such as Russia, known as OPEC+, that members would wind down their production curtailment program more quickly than planned.

For more than a year OPEC+ had been limiting production by millions of barrels per day because of weak global demand growth. But members agreed in December to start gradually rebuilding production beginning in April.

But now, instead of a gradual increase, OPEC+ will add 441,000 BPD in May, which would have been the increase over three months under the former gradual rebuilding program.

OPEC+ members will meet monthly now to review the market and future increases may be extended, paused or reversed subject to evolving market conditions.

On April 10 the U.S. Energy Information Administration forecast that the weaker crude price would result in gasoline prices in the high demand summer driving season lower than what they have been in recent years

The report included data and policy developments up to April 7, but given that U.S. policy and responses to it from other countries changes daily, the forecasts will likely change in coming months.

For now, EIA forecasted U.S. average retail gas would be US$3.10 per American gallon, down 20 cents from its previous forecast and the lowest inflation-adjusted summer average price since 2020.

Last summer U.S. gasoline ranged roughly from $3.40 to $3.60.

Without getting into all the details, the EIA forecast meant that we’ll avoid the usual summer increase in gas prices.

Canadian gas prices are always higher than those in the U.S., mostly because of higher federal and provincial taxes, but the information from the EIA suggests that even here, gasoline this summer should be a bargain compared to recent years.

Regarding crude oil, the EIA forecast only modest increases in global demand, which production would easily keep up with, given the increase in OPEC+ production.

It forecast the global benchmark Brent price would average US$68 per barrel this year, dropping to US$61 in 2026, but noted there was much uncertainty to the outlook.

Brent June closed at US$64.76 on April 11, so it was substantially lower than the EIA forecast for the year’s average.

Where things go from here on in impossible to predict. Investment bank Goldman Sachs last week laid out several scenarios of U.S. tariff levels and OPEC+ production increases with the result for Brent crude falling into the low US$60s to high US$50s by December.

At the close April 11, the U.S. had paused the worst of its tariffs threats against most countries but the China situation was out of control.

U.S. tariffs on China were 145 per cent and China’s were at 125 per cent.

The high level of tariff uncertainty means there is uncertainty to how companies and countries will react.

Trump came into office promising to change policies to make it easier to drill for oil in the U.S., but lower oil prices reduce the incentive to invest in exploration and new drilling.

To contact D’Arce McMillan, email newsroom@producer.com.

The Agricultural Producers Association of Saskatchewan had long advocated for the removal of the surcharges, saying they affected farm profitability.

Carbon surcharges were implemented to cover costs associated with emissions and fuel consumption.

Both Canadian National Railway and Canadian Pacific Kansas City eliminated the surcharges as of April 1 in Alberta, Saskatchewan, Manitoba, Ontario and New Brunswick after the federal government ended consumer carbon pricing.

“This is massive for farmers,” said APAS president Bill Prybylski in a news release. “Axing the surcharges puts more cash where it belongs, in our pockets and back into our rural communities.”

APAS said since 2019, Saskatchewan farmers paid about $200 million in the fees. It estimated that the bill in 2025 would have been $80 million.

“We’ve fought tirelessly for relief and seeing it finally come to an end is incredibly rewarding,” Prybylski said.

The move comes at a time of incredible trade uncertainty.

A CN notice to producers said the Low Carbon Fuel Standard is still in place in British Columbia and “will remain unchanged per the tariffs issued effective April 1, 2025.”

APAS said it remains concerned about that and whether it will increase shipping costs to B.C. ports. The organization is also advocating for transparency of how the federal Output-Based Pricing System, or industrial levy, impacts farm input costs.

CN said it would follow legislation closely and re-adjust if necessary.

Contact karen.briere@producer.com

Premier Scott Moe announced last week the province will be carbon tax-free as of April 1.

“What we’re doing here today is really taking our cue from federal leaders,” he told reporters.

Prime Minister Mark Carney previously announced the consumer portion of carbon pricing would end the same date, but has not said what he would do about large emitters. Conservative leader Pierre Poilievre is promising to end both.

Moe said the removal of the tax from all SaskPower bills would save hundreds of dollars for farms, families, businesses and industry. He said those bills are the one place that people see the silent, or hidden tax, because it was itemized, but they didn’t see it on fuel and groceries.

“In taking the lead on the removal of this harmful tax we hope all federal leaders will support our position and allow the provinces to regulate in this area without imposing the federal backstop,” he said.

Saskatchewan had already cut carbon pricing on SaskEnergy bills last year after the federal government announced carve outs for those who heated their homes with oil.

Crown Investments Corporation minister Jeremy Harrison said families have saved over $400 on their bills as a result.

Moe said Saskatchewan already produces some of the most sustainable products on earth. There is a net zero oil operation and a net zero copper mine under construction. Studies at the Global Institute for Food Security have shown a far lower carbon footprint for crops grown in the province compared to competitors.

The government said its decision will allow people to confidently make investments and increase production.

In the meantime it will consult with industry on the future of the OBPS system.

The Saskatchewan Association of Rural Municipalities (SARM) said it supported the government’s decision. President Bill Huber said it would make rural Saskatchewan more competitive.

“By eliminating the industrial carbon levy the province is taking a crucial step to reduce unnecessary costs for our municipalities and agricultural producers,” he said.

SARM advocates for environmental policies that recognize the challenges and solutions in rural areas. It also wants made-in-Saskatchewan approaches.

The Saskatchewan Cattle Association said producers rely on electricity to operate their farms and removing the tax will help them save.

“Increasing costs for producers is never an effective way to improve environmental outcomes,” said chair Chad Ross. “The beef we raise here in Saskatchewan has one of the lowest carbon footprints in the world, and that progress was achieved without a carbon tax.”

The Western Canadian Wheat Growers also commended Moe’s action, saying it would provide critical relief to farmers dealing with uncertainty and instability.

The organization called it “a lifeline for farmers who have been disproportionately burdened by rising input costs and shrinking margins, particularly in the face of tariffs and federal policies impacting their competitiveness on the global stage.”

The opposition NDP questioned how the provincial budget is balanced without the OBPS fund. It supports the removal of the tax, which it called a Sask. Party slush fund, but said it also leaves a gaping hole in the province’s revenue.

Contact karen.briere@producer.com

New prime minister Mark Carney took office March 14 and immediately announced he was scrapping it as of April 1, the date it was set to rise to $95 per tonne. Canadians can still expect their final rebates in April.

Some are arguing the tax isn’t officially gone unless the law is repealed in Parliament, but cabinet can make regulatory changes and did so through an order-in-council. The carbon price on large industrial emitters is still in place.

The House of Commons was set to open March 24, but Carney is expected to call an election before then.

The Canadian Federation of Agriculture said the move provides much needed relief for farmers.

“Farmers are being squeezed from seemingly all sides at once with inflation and tariffs from both the U.S. and China. The long-awaited removal of the carbon tax will provide farmers a bit of relief from this pressure and can be seen as recognition for the difficult place Canadian farmers and consumers find themselves in today,” said president Keith Currie.

The CFA and other members of the Agriculture Carbon Alliance were strong proponents of the private member’s Bill C-234, which would have exempted from the tax propane and natural gas used to dry grain and heat buildings. That bill passed in the Commons in 2023 but then became bogged down, and amended, in the Senate. There was no action on the legislation for the past year, and it is now moot.

The Parliamentary Budget Office had estimated farmers would save more than $100 million each year without the tax.

“The signing of this order-in-council is a reassuring step in the right direction, but we need to see Parliament reconvene and provide a long-term solution that removes the consumer carbon price from legislation and ensures farms of all sizes are exempt from the carbon price,” Currie said.

Saskatchewan premier Scott Moe was silent on the move, even though cancelling the tax was at the top of a list of priorities he sent Carney earlier.

His agriculture minister, Daryl Harrison, said it was the right thing to do but came too late.

Sylvain Charlebois, senior director of Dalhousie University’s Agri-Food Analytics Lab, said the most damaging aspect of the tax is still in place as far as food is concerned.

“Carney’s plan appears to shift toward what some call a ‘shadow’ tax system — continuing to tax major polluters in the same way as before. While this version of carbon pricing may be less visible to consumers, its economic impact is no different,” he said in an opinion piece.

Food affordability will still be a concern because the tax accumulates through the supply chain, he said, with everyone from farmer to trucker to processor to distributor paying along the way.

“By the time a loaf of bread reaches the consumer, multiple layers of carbon tax have been applied at different stages, increasing the final retail price,” he said.

Charlebois said there is also GST on that tax, pushing the price even higher.

He said since the tax was implemented in 2019 at $20 per tonne, it has made the agri-food sector less competitive. It has risen by $15 per tonne each year since 2022.

“Wholesale food prices appear to be putting even more pressure on retail food prices,” he said.

“In essence, this indicates that our sector’s competitiveness has been compromised.”

He added Ottawa should initiate a “real, evidence-based debate on how best to tackle climate change without compromising food security and affordability.”

New federal agriculture minister Kody Blois, also sworn in March 14, called the tax’s removal the right approach.

“I think it’s a really good move,” he told reporters.

“The prime minister has rightfully highlighted that this policy, although has merit from a carbon reduction side and of course was giving back rebates, had become very divisive and you saw our work from our Atlantic caucus over the years to get adjustments.”

He said he expected the decision would go over well across the country.

Farmers are largely exempt from carbon pricing, but the Bill C-234 debate highlighted the divisiveness and the disconnect between Ottawa and farmers. Blois was the only Liberal MP to vote in favour of the bill.

He also said his first phone call would be to Harrison in Saskatchewan to discuss Chinese tariffs on canola, peas and pork.

Harrison said the two did talk briefly. He said it’s positive that Blois has spent so much time in Saskatchewan.

“I urged him to encourage the prime minister as strongly as he could to engage with China first,” he said.

“At this point, China trade is more important than trade to France. If he had time to fly across the ocean, he had time to fly to China.”

That did not happen, but Harrison said he would also be willing to go on a trade mission with Blois and any others to resolve the tariffs that were to take effect March 20.

He said the canola crush sector in the province is at risk if the tariffs are in place.

Contact karen.briere@producer.com

Just hours after he and his cabinet were sworn in March 14 and held their first meeting, he made good on his election promise to cut the tax.

“This is a cabinet focused on action. It’s focused on getting more money in the pockets of Canadians,” he said.

“Based on the discussion we’ve had and consistent with the promise I made and others supported during the leadership campaign, we will be eliminating the consumer fuel charge immediately and we will be ensuring that those Canadians who have received rebates will continue to receive rebates in the next quarter.”

Those rebates are due to arrive before the end of April.

Carney said this will help Canadians who are struggling to make ends meet. But he also said it is part of a much bigger set of measures the government will take to “ensure we fight against climate change, that our companies are competitive and the country moves forward.”

The Canadian Taxpayers Federation noted the tax is currently 17 cents per litre of gasoline, 21 cents per litre of diesel and 15 cents per cubic metre of natural gas, and that the Parliamentary Budget Officer found it cost the average family $399 more than the rebates they received.

Conservative leader Pierre Poilievre said Carney is only pausing the tax until after the election.

“He’s flip-flopping on his beliefs to trick Canadians into a fourth Liberal government,” he said on social media.

Contact karen.briere@producer.com

Carney’s victory was certified Sunday evening, as the former Bank of Canada governor took 85 per cent of the vote among Liberals. His campaign was launched following Prime Minister Justin Trudeau’s announcement he would resign in early January. Trudeau said he would hold the position until the party chose a new leader.

Different priorities for agriculture?

This change in leadership could mean different priorities for agriculture, even from a few months ago.

“At the big level, clearly it’s changed a lot,” said Tyler McCann, Managing Director of the Canadian Agri-Food Policy Institute.

“We’ve seen the Liberal Party up in the polls. We’ve seen a new leader bring new life into it,” McCann said, “but it’s not clear to me what that means from an agriculture perspective. Again, I think we expect to see … agriculture will still be a minor issue.”

Carney has pledged to “immediately remove” the consumer carbon tax in his climate plan, though may not be as tough on the overall carbon tax as the Poilievre-led Conservative Party.

“When I see that some things that’s not working, I will change it,” said Carney in his acceptance speech Sunday evening, “so my government will immediately eliminate the divisive consumer carbon tax on families and farmers.”

No longer a ‘carbon tax election’?

Canadian farmers and agriculture group leaders have indicated the price on carbon as one of their primary concerns ahead of the 2025 federal election.

McCann said this move changes the dynamic of an election that was expected to revolve around carbon pricing: “this is now a Trump or tariff election,” McCann said.

“The policy differences between the Conservatives and the Liberals on carbon and sustainability issues, certainly when it comes to the consumer carbon tax, have narrowed. Carney and Poilievre have effectively the same position.”

McCann said this shift in policy may reveal broader issues in the campaign.

“I think that that will take the issue off the agenda so to speak for many farmers, but I do think it highlights, in my mind, the big issue of the campaign, and that is: do people think that Liberals have changed?”

Stance on tariffs

Carney has also taken a hardline stance against U.S. tariffs, saying in a statement he would support dollar-for-dollar retaliatory tariffs and diversifying Canada’s trade relationships with partners other than the U.S.

Follow all our coverage of the tariffs situation here

“There’s someone who’s trying to weaken our economy,” Carney said. “Yep. Donald Trump.”

“The Canadian government has rightly retaliated and has rightly retaliated with our own tariffs that will have maximum impact in the United States and minimum impact here in Canada.”

“The government will keep our tariffs on until the Americans show us and until they can join us in making credible and reliable commitments to free and fair trade,” Carney added.

McCann said tariffs could be the one issue to push agriculture more to the forefront this election cycle, though he was doubtful of how much the message of diversifying trade will resonate.

“I think you need to go a step further, he said. “Are you going to address the potential for labour disruption through changes to the Canada Labor Code? That is something agriculture would need to see.”

“Are you going to invest significantly in trade enabling infrastructure, and are you going to put the efforts, the political and technical resources into resolving market access barriers?”

Carney’s new tenure as Prime Minister could be short, as Canadians can expect a federal election called within the next few weeks.

Carney has also promised to scrap the carbon tax, stop a planned increase in the capital gains tax and pledged to remove barriers to trade within Canada. He vowed to double the pace of new housing construction over 10 years and cap immigration levels, a shift in policy started by Trudeau in response to a backlash over a housing shortage and high prices.

Follow all our coverage of the tariffs situation here

Liberal party members bet on Carney as the man best placed to take on U.S. President Donald Trump, who has threatened annexation as well as launching a trade war and punishing tariffs on the longtime ally. Liberal sources say Carney will soon call for a general election.

“The Americans want our resources, our water, our land, our country … if they succeed, they will destroy our way of life,” Carney said in his acceptance speech late Sunday.

Carney, who supports dollar-for-dollar retaliatory tariffs in response to Trump’s measures, could speak to Trump as early as Monday, Politico said.

Carney, who has no political experience, is normally more reserved than Trudeau, who often had a combative relationship with Trump.

The United States is due to slap a 25 per cent tariff on Canadian steel and aluminum on Wednesday. Ottawa imposed a 25 per cent tariff on $30 billion worth of U.S. imports when Trump last month announced his initial tariff plans.

“My government will keep our tariffs on until the Americans show us respect,” Carney said on Sunday.

Trump’s move triggered an angry backlash in Canada, where provinces pulled U.S. alcohol off the shelves and urged people to buy Canadian.

Ontario, the most populous of the 10 provinces, is due to announce on Monday that it is imposing a 25 per cent surcharge on electricity exports to New York, Michigan and Minnesota.

MAINTAINING MOMENTUM

Carney won with 86 per cent of the votes cast by party members. The Governor General, the representative of Britain’s King Charles in Canada, will soon invite him to form a government and formally replace Justin Trudeau as prime minister.

The Globe and Mail said the official handover could take place on Thursday or Friday.

The reconstituted Liberal government could be short-lived. If Carney does not call an election, his political opponents have said they would defeat the government at their first opportunity when Parliament reconvenes in late March.

For months the opposition Conservatives led in the polls, often by double-digits ahead of the governing Liberals.

However, the political landscape shifted with the return of Trump to the White House, the prospect of tariffs and the threat of annexation. This coincided with a surge of support for the Liberals, who have ridden a wave of renewed national unity to come neck-and-neck with the opposition party, according to the latest polls.

Now the challenge will be to maintain that momentum and convince Canadians to give a party that spent a decade in power under Trudeau another go – while fighting a trade war on multiple fronts.

“Without overstating it, the challenges are almost unique in Canadian history, if not unique in the post-war period,” said Cameron Anderson, a politics professor at Western University.

Carney will be the first person to become Canada’s prime minister with no prior experience in electoral politics. The former governor of the Bank of Canada and Bank of England shot to the front of the Liberal leadership race, ahead of two women who held seats in Trudeau’s cabinet.

Liberals sought to compare Conservative leader Pierre Poilievre to Trump in a recent advertisement. Poilievre in turn ramped up attacks on Carney on Sunday.

Originally, it was to be returned to the people in the province or territory where it was collected. This article isn’t relevant for British Columbia and Quebec because neither has a federal carbon tax.

Individuals receive the Canada Carbon Rebate quarterly. Payments for people living in rural areas are 20 per cent higher, if taxpayers tick the box on their personal tax return indicating that they live in a rural area.

For farmers, there are two possible carbon tax rebates:

• Return of fuel charge proceeds to farmers
• This rebate was first introduced in 2021 and has been increasing annually.

On Jan. 10, the finance minister announced the 2024 and 2025 rebate percentages, which are 0.229 per cent for 2024 and 0.25 per cent for 2025. This works out to $2,290 in rebates for every $1 million in eligible farming expenses in 2024, and $2,500 in rebates for every $1 million in eligible farming expenses in 2025.

Eligible farming expenses are calculated on a cash basis (not the accrual basis), and non-arm’s length expenses are excluded. This is to prevent gaming the system by inflating expenses to collect more rebates. For example, you can’t claim the rebate on rent and wages paid to family members.

On personal tax returns, this rebate is calculated automatically when you file a farming statement. The minimum threshold to qualify is $25,000 of eligible farming expenses.

For corporations and partnerships, this rebate has been hard to claim. When it was first released, the rebate was awaiting royal assent in 2022, and we had to amend tax returns to claim the rebate.

In 2023, our firm tried contacting the finance department to explain that the rebate for corporations is prorated through the year and that it needed to release the rebate amount earlier. For example, a July 31 corporation year-end will qualify for 7/12ths of the 2023 rebate.

The department finally released the 2023 rebate rate on Jan. 19, 2024, and the Canada Revenue Agency’s tax return schedules weren’t updated until May 2024.

As a result, many corporations that had tax returns filed earlier missed out on the rebate. In late 2024, CRA started going back and amending the returns for the missed rebates, and as a result, some corporations are just receiving their 2023 refunds.

For the 2024 tax year, we tried emailing the finance department to release the rates earlier, but it didn’t release the rates until Jan. 10, 2025. Corporations that already had their January through September 2024 tax returns filed again missed out some of the rebate. Fortunately, this time it released the 2025 rate as well, so this won’t be an issue this year.

Canada Carbon Rebate for Small Businesses

Corporations that have one to 499 employees qualify for this rebate. Unincorporated businesses and partnerships do not qualify, even if they have employees.

This rebate was first paid out in late 2024, with a retroactive payment for 2019- 23, based on the number of employees the corporation had. Corporations had to have their 2023 tax return filed by July 15, 2024, in order to qualify. This was extended to Dec. 31, 2024.

The rebate was based on the number of employees on payroll (T4 slips) that the corporation had over the past five years. In Saskatchewan, a corporation would have received $1,156 per employee if the employee had a T4 for every year from 2019-23.

If a corporation didn’t have any employees, it wouldn’t have received a rebate. This is common for farm corporations, where the shareholders take dividends instead of payroll.

Many corporations received this payment just before Christmas. If you think you should have received a payment and didn’t, make sure that all your other CRA filings are up to date, such as GST returns. CRA also applied the payment against any CRA balance owing.

Originally, it was assumed that this rebate would be taxable income, like the taxable return of fuel charge proceeds to farmers. However, the finance minister announced that it was nontaxable via an X post, and in the Dec. 16, 2024, Fall Economic Statement, the government announced that these rebates are not taxable income.

The Dec. 16, 2024, Fall Economic Statement proposed to modify the Canada Carbon Rebate for Small Businesses for the 2024-25 years by creating a new base payment. Small business that have between one and 20 employees would qualify for a payment amount that is equivalent to having 20 employees.

A corporation that files at least one T4 for 2024 may qualify for a larger rebate for 2024. This should be weighed against the hassle of paying payroll, filing a T4 and the ongoing CRA compliance with payroll account filings.

Given the political uncertainty at the time of writing, there is no guarantee what, if any, 2024 carbon tax rebate will exist, and if the changes in the Dec. 16, 2024, Fall Economic Statement will actually be implemented. It is also possible that the actual legislation could change from the announced proposal.

The ongoing carbon tax rebate saga has resulted in a lot of hassle for accountants. In the future, less complexity and more certainty over actual legislation would be much appreciated.

Levi Derksen, CPA, CGA, is a senior manager in the Ag Team at Buckberger Baerg & Partners LLP in Saskatoon. He can be contacted at lderksen@bbllp.ca.

A petroleum industry marketing organization releases a story about how much the carbon tax is costing municipalities in Alberta. It points out that the carbon tax has cost those municipalities $37 million.

To the average person, $37 million is an incredible amount. To reinforce this point, the writer suggests that eliminating the carbon tax would create nearly 8,000 student jobs in Alberta, though it’s not clear what all these students would do.

They must be jobs for high school students because this estimate is based on Alberta’s $15 per hour minimum wage. Most university students look for a better wage to help pay tuition, student loans and housing.

Another story that will undoubtedly have far less coverage in Alberta is the recent complaint by the Rural Municipalities Association that tax breaks given by the Alberta government to the oil and gas industry are costing municipalities $332 million in lost revenue. The RMA has launched the “Below The Drill” campaign to raise awareness of what is essentially an oil and gas industry subsidy that is hurting rural Albertans.

The purpose of carbon pricing is to tax the use of fossil fuels because there is a public cost to climate change, including adaptation and recovery from disasters like the wildfire that devastated Jasper last summer. It also creates an incentive for municipalities to reduce their carbon tax bills by investing in cost-saving initiatives like solar panels on municipal buildings.

Consider a carbon tax as a small license fee for using fossil fuels to heat your home and power your vehicles. Industry, municipalities and households all pay it, which can be substantial for heavy users of climate-warming fossil fuels. The federal consumer carbon tax gets returned to Canadian households as a carbon rebate, offsetting the costs for average Canadians.

But the fossil fuel industry, the Alberta government and federal Conservative leader Pierre Poilievre would like Canadians to hate the carbon tax and together they’ve generated significant political momentum to mould public opinion toward the belief that carbon pricing is a crippling burden to Canadians.

In reality, carbon pricing hasn’t been the slightest bit crippling to the oil and gas industry. It has reaped record profits in recent years, even as carbon pricing has increased around the world. Yet they work to eliminate the threat.

The Canadian Climate Institute provides an excellent summary of how industrial carbon pricing works. Even Alberta has such a policy, which essentially requires large industrial emitters to pay the carbon price if their emissions are above a certain threshold. Companies with emissions below the threshold collect carbon payments.

If the carbon tax is significantly driving up costs for a company with high levels of carbon pollution, they can pass these additional costs to consumers by raising the price of their product. Essentially, the cost of pollution is paid by consumers, businesses or governments. There are no complaints about this less noticeable carbon pricing scheme.

Industrial carbon pricing is still below the radar for most people, but it could be weaponized by opportunistic politicians once the consumer carbon tax is dead. In this way, it is fairly easy for the fossil fuel industry and its devoted followers to crush any attempt to make polluters pay the cost for overheating our planet.

Robert Miller is a retired systems engineer, formerly with General Dynamics Canada, who volunteers with the Calgary Climate Hub and writes on behalf of Eco-Elders for Climate Action. He lives in Calgary.

The plant, to be built in Belle Plaine in central Saskatchewan, is the brain child of Saskatoon’s Genesis Fertilizers and CARBONCO, a South Korea-based Total Solution provider in carbon capture, utilization and storage (CCUS) business. Once complete, it will produce low-carbon ammonia and urea nitrogen fertilizer.

The fertilizer manufacturing process will employ standard industry practices, according to the two companies. Then CARBONCO’s technology will kick in. Using a proprietary amine-based solvent, the company says it will capture post-production carbon dioxide so it can be put underground.

“Our urea production is no different than anyone else’s urea production,” said Jason Mann, chief executive officer of Genesis Fertilizers. “The difference is, we’re capturing the rest of the CO2 instead of just putting it out into the atmosphere. So, just by that, we have a lower carbon intensity fertilizer than anybody else if they’re not doing carbon capture.”

Gas from production will be discharged through a flue, which will be installed with an absorber where carbon dioxide reacts with the solvent. The CO2 remains behind and remaining components escape into the air.

The captured CO2 then moves to a stripper, which separates it from impurities and the solvent.

“That CO2 is all collected, compressed and you send it over to a carbon trunk (pipeline),” said Mann.

At that point, another company will transport it to a sequestration site — a saline aquifer — near the plant and 3,000 metres underground, said Mann.

“It ends up binding with the (permeable) rock within the aquifer. And that’s the permanent storage that everybody’s looking for.”

The company says it will be able to capture about one million tonnes of CO2 annually. The result will be a carbon-neutral process, said Sang-il Kim, general manager and head of the business development team for CARBONCO.

“Whatever CO2 comes from their fertilizer plant will be captured and sequestered back. So this will be carbon neutral to the emissions to the atmosphere (with) no harm to the environment.”

Success of the plant hinges on availability of the saline aquifer that will lock in the CO2.

“Not everywhere in the world has these kinds of geological formations,” Mann said. “We’re lucky in Western Canada. We have them. The U.S. Gulf Coast has them. Maybe some places in the Arab Gulf, so there’s a lot of places in the world that can’t even do permanent CO2 sequestration underground.

“So, where we are just lends to this type of activity and that’s why you see a lot of these projects in Western Canada that are looking towards carbon capture and permanent sequestration underground.”

Belle Plaine, a village between Regina and Moose Jaw, was chosen because it is close to the aquifer and is also home to Yara’s nitrogen plant.

“If you look at Yara’s financials, you see how profitable that plant is for them,” Mann said. “To make nitrogen fertilizer, you need three ingredients. You need water, you need gas and you need nitrogen. You need the air because you (get) nitrogen out of the air.

“We’ve got all the gas lines there. We’ve got the water supply there. We have both railroads adjacent to the property there. The Trans-Canada Highway’s two miles away. We have a great workforce in both Moose Jaw and Regina. We’re in the heart of the agriculture area. We’re close to the U.S. for proximity for export. There’s lots of reasons on that side of it.”

Mann predicts a “trickle-down” effect through the value chain that will interest food companies and consumers seeking a lower carbon footprint in the food they sell and buy.

Government policy, such as the federal government’s carbon pricing scheme, adds another layer of attraction for decarbonized fertilizer, he added.

“If you don’t have a decarbonization plan, you’re setting yourself up for taxation on carbon emissions. So, it’s hard to imagine any new plant being built without some form of decarbonization.”

The plant has a long way to go. Mann estimates it will be five years before the lights go on. Even with that lengthy time, he believes his company will be at the forefront of post-production carbon capture technology.

“All the work we’ve done on this new generation of fertilizer plants, we’re probably right at the front end of that.”