Environment and Climate Change Canada (ECCC) today published the preliminary draft Direct Air Carbon Dioxide Capture and Geological Storage federal offset protocol (the DACCS Protocol). The DACCS Protocol is intended to create an incentive for proponents to undertake projects that capture carbon dioxide (CO2) directly from the atmosphere and store it in subsurface geological formations. Eligible projects would be able to generate federal offset credits under the Canadian Greenhouse Gas Offset Credit System Regulations (see our earlier bulletin here).
Overview. Eligible projects under the DACCS Protocol must generate CO2 removals (CDRs) from the storage of CO2 captured directly from the atmosphere in onshore, subsurface geological formations. Project sites must be located in Canada, in a single province or territory, and the capture facility within the project site must have been operating on or after January 1, 2022. Projects cannot take place on land that is not covered by a CO2 geological storage regulatory framework and CDRs cannot be generated from (i) the storage of point-source captured CO2 (e.g. an industrial facility), (ii) the storage of CO2 in any materials or products (e.g. concrete and mining waste), or (iii) the use of CO2 for the purposes of enhanced oil recovery (EOR).
Eligible project activities. Eligible project activities under the DACCS Protocol include:
- Operation of a capture facility within the project site. There is no restriction on the specific direct air CO2 capture processes used, including liquid solvents, solid sorbents, or any other existing or emerging methods. Further, during the crediting period, the capture facility within the project site may provide captured CO2 for purposes/end uses other than CO2 geological storage.
- Operation of transport infrastructure within the project site (e.g. pipeline, rail, truck). The DACCS Protocol provides that the transport infrastructure within the project site used to transport the captured CO2 may have been operating prior to January 1, 2017, and for purposes unrelated to the project.
- Operation of injection infrastructure within the project site. The DACCS Protocol provides that the injection infrastructure within the project site may have been injecting CO2 into the associated storage reservoir prior to January 1, 2017, and can be a storage hub accepting CO2 from sources unrelated to the project (i.e. other direct air or point source capture facilities).
- Management of a storage reservoir within the project site. There is no restriction on the geological type of storage reservoir used, other than EOR being ineligible.
Next steps. ECCC has launched a 60-day public consultation on the DACCS Protocol and is hosting a webinar on February 19, 2025, to present an overview of the preliminary draft protocol and answer questions. Interested parties are encouraged to attend the webinar and submit comments on the DAC Protocol by March 28, 2025.
For assistance with preparing comments or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.