The Canadian Federal Government give states the flexibility to develop their own carbon pricing systems, that meet a minimum stringency. Alberta chooses to implement a Technology Innovation and Emissions Reduction Regulation (TIER) for heavy emitters and the Federal fuel program for transportation emissions.
As of 2021, the market had nearly 35+ million credits circulating in the market, which is sufficient to cover two years of obligations. Two major drivers will have an impact on the offset supply:
1. Decline in current stock of pneumatic and wind power generation offsets
2. Increased CCUS offset credit generation.
Our cCarbon Outlook model for Alberta points towards a surplus of credits in the later half of the decade. CCUS projects which the Alberta Government has been promoting - is expected to significantly increase supply of offsets. CCUS build-out remains a huge unknown - a timely opening of the proposed plants would saturate market.
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