When he launched his bid for Canada’s highest political office in January, Mark Carney was among the first world leaders to explicitly include carbon removal technology in his platform.
With Carney at the helm, the Liberal Party platform called for Canada to “become a world leader in carbon removal and sequestration,” and proposed a range of initiatives designed to turn the country into the “leading hub” for deployment of the technology. Those included expanding investment tax credits for carbon removal technologies, building a national CDR market, and establishing separate carbon removal targets for Canada for 2035 and 2040.
Carney’s campaign earlier this year was a leading indicator of just how much enthusiasm there is in Canada to take advantage of the U.S. pullback from climate-related sectors after President Trump took office, said Na’im Merchant, co-founder and executive director of Carbon Removal Canada, a policy group dedicated to scaling up CDR in the country.
“We were kind of awestruck by the specific reference to carbon removal technology [in the platform] because it typically gets blended in with broader comments around carbon management,” Merchant explained. The Canadian government, as well as the country’s nonprofits, academics, and investors, see the stalling progress in the U.S. as an “opening for Canada to support a sector that has significant economic opportunity attached to it,” he added.
And then Carney won. Since he took office in March, Merchant said, there’s been a notable shift in the level of interest from carbon removal developers considering Canada for their next project.
“Many people were not convinced that [Carney] could win,” he explained. “What we’ve seen since the election has essentially been a shift from ‘that could be interesting’ to ‘we’re going to make a move.’” That’s especially true for companies with high capex pathways, like direct air capture, he added; for those looking to build first-of-a-kind commercial-scale facilities, for example, Canada’s 60% investment tax credit is key.
Carney’s CDR propositions
Carney, who has an extensive background in carbon markets and climate finance, came to power in large part thanks to Trump. Prior to Trump’s election and inauguration in January, Canada’s Conservative Party had a commanding lead in the polls. The right was widely expected to win the 2025 election and lead the next government. But a backlash against Trump’s aggressive tariff threats and annexation rhetoric, among other things, rallied Canadian voters behind Carney.
And given the new prime minister’s previous work, it’s perhaps unsurprising that his platform offered such specifics as to how exactly to make Canada “a world leading hub” for CDR.
While serving as UN Special Envoy for Climate Action and Finance, Carney launched the Taskforce on Scaling Voluntary Carbon Markets, an initiative focused on standardizing voluntary carbon markets globally, and scaling them at least fifteen-fold.
And Canada itself isn’t starting from scratch when it comes to building a carbon removal ecosystem. Before Carney even announced his candidacy the government had implemented a carbon capture, utilization, and storage investment tax credit that covers 60% of capital expenditures for new DAC facilities. Canada also has a carbon removal procurement program, and earlier this year was the first country to publish a federal protocol for direct air capture.
Many of Carney’s plans build on that existing foundation. For example, the Liberal platform calls for extending the country’s existing investment tax credit for direct air capture to cover more carbon removal solutions. That’s something that doesn’t require legislation change, and could therefore happen relatively quickly, Merchant explained.
“We expect fairly rapid progress here,” he added. “There’s an ability to move really quickly and build on some of the early support for carbon removal that we’ve seen over the last couple of years.”
The same is true for the government’s plans to establish Canada’s first climate targets specifically for carbon removal, and to scale the existing federal procurement plan. Those changes are poised to make a major impact, and can be accomplished through regulatory changes rather than new legislation, Merchant said.
In addition to that policy certainty, though, Canada is well-positioned to become a global CDR hub thanks in part to its geography, said Ben Rubin, executive director of the Carbon Business Council.
“Its abundant renewable energy, durable geological storage, and expansive coastlines support a wide range of carbon removal pathways,” Rubin explained. “With the right enabling policy framework, carbon removal can deliver significant economic opportunities and jobs for Canadians.”
The new CDR world order
The United States has, over the last several decades, proven its strength at bringing new technologies down the cost curve, by leveraging the national labs, and rolling out the red carpet for first-of-a-kind projects, explained Erin Burns, executive director of nonprofit Carbon180.
“We have [supportive] laws around IP, we’ve got the Silicon Valley ecosystem and the way that our capital moves in the United States…all of these things make it easier for the startups to start developing businesses and projects,” Burns said.
That landscape has meant that the U.S. largely “hasn’t worried about risking the loss of something like the innovation ecosystem,” she added. “We’re risking that now, which is new for us, and because of that, also risking those domestic supply chains.”
In the near term, CDR companies operating in Canada might not have access to the same resources they might in the U.S., Burns said. But policy certainty and lower turnover rates at federal agencies in Canada — and the fact that those agencies themselves are less politicized than their American counterparts — “is worth so much.”
Meanwhile, in the U.S., the Trump administration is actively working to unravel many of the support systems put in place for the carbon removal industry in the last several years.
Landmark projects at the Department of Energy are under review. The administration has gutted key offices responsible for carbon removal programs, and rolled back efforts to coordinate CDR strategies across agencies.
It’s a shift that is being felt globally, with other players — including Canada — stepping in to fill the void. Just last month, Canada and the European Union announced a bilateral agreement to build out their CDR sectors, promote both carbon pricing system and carbon border measurements.
Deep Sky, a Canadian carbon removal developer with a tech-agnostic approach, has been at the forefront of leveraging the recent surge in federal support. The company has been working to lure CDR startups and buyers to Canada since before Carney’s win, and also building its own projects with support from both federal and provincial governments. And so far in 2025, interest has spiked, Deep Sky CEO Alex Petre told Latitude Media.
“In the past six months, we’ve noticed an influx of inquiries at Deep Sky from companies who may have previously set their sights on the US as a way to develop and commercialize their technology,” Petre said.
In June, Deep Sky completed construction of its Alpha project, a CDR innovation and commercialization center that will bring together up to 10 different DAC technologies. The company secured a $5 million grant for the project from the province of Alberta, where it is located, which is another layer of support that Petre described as “instrumental in scaling direct air capture and creating an entirely new opportunity for Alberta, Canada, and the world.”
Ultimately, the Canadian project went from land lease signing to construction completion in less than a year — a speed that Deep Sky described as “unprecedented” in the world of carbon removal infrastructure.
“CDR projects need to be thought of as nation-building endeavors,” Petre told Latitude Media. “These are just as important as new pipelines and can help Canada achieve the energy security and leadership position it desires.”