CCFD – Resilient LLP (formerly DeMarco Allan LLP)

Canada Growth Fund (CGF) today announced that it has completed its first transaction under its mandate to use nearly half of its $15B budget for carbon contracts for difference (CCfDs) and offtake agreements. CGF is the federal agency (a subsidiary of Canada Development Investment Corporation) with a mandate to “build a portfolio of investments that catalyze substantial private sector investment in Canadian businesses and projects to help transform and grow Canada’s economy at speed and scale on the path to net-zero.” PSP Investments acts as the investment manager for CGF through a wholly-owned subsidiary. Via a hybrid security, CGF has agreed to invest $200M in Entropy Inc., a Calgary-based developer of carbon capture and sequestration (CCS) projects. Alongside the investment, CGF and Entropy have entered into a “carbon credit offtake commitment” agreement (CCO) whereby CGF has committed to purchase up to 9M tonnes (up to 600K tonnes per annum (tpa) over a 15-year term) of TIER or equivalent carbon credits from Entropy projects. The initial project to benefit from the CCO is intended to be the Advantage Glacier Phase 2 project, drawing up to 185K tpa at an initial price of $86.50 per tonne, for a total of approximately 2.8M tonnes over the 15-year term. Upon successful deployment of the initial 600K tpa of CCO, CGF may make available a further 400K tpa of CCOs for additional Entropy CCS projects in Canada. This initial transaction notably appears to be in the form of an offtake agreement, rather than a contract for difference. The Globe and Mail reported that other project proponents, including larger oil and gas producers and members of the cement and chemical industries, have been attempting to negotiate contracts with the CGF at rates higher than the initial price of $86.50 per tonne agreed in this initial transaction. For further information or to…

Deputy Prime Minister and Minister of Finance Chrystia Freeland has released the federal government’s Fall Economic Statement 2023 (the FES). The FES sets out two areas of focus: supporting the middle class through targeted affordability, mortgage support, and price stabilization measures; and measures to support housing construction and housing affordability generally. This bulletin outlines key energy and climate highlights from the FES: Implementation of new clean economy investment tax credits for carbon capture, utilization and storage (CCUS), clean technology adoption, clean hydrogen, clean technology manufacturing, and clean electricity. Subject to consultations, FES commits to delivering all investment tax credits in 2024. The clean economy investment tax credits would be introduced through legislation this fall in the case of CCUS and Clean Technology, and by the end of 2024 in all other cases, with projected effective dates as follows: CCUS: January 1, 2022 Clean Technology: March 28, 2023 Clean Hydrogen: March 28, 2023 Clean Technology Manufacturing: January 1, 2024 Clean Electricity: Budget 2024 for projects that did not begin construction before March 28, 2023. Expansion of the 30-per-cent Clean Technology investment tax credit. FES proposes to expand eligibility to include systems that produce electricity, heat, or both electricity and heat from waste biomass. This expansion will apply to eligible property that is acquired and becomes available for use on or after the date of the FES. Expansion of the 15-per-cent Clean Electricity investment tax credit. FES proposes to expand eligibility to include systems that produce electricity or both electricity and heat from waste biomass. This expansion will apply to eligible projects as of the date of Budget 2024, provided that construction did not begin before March 28, 2023. Canada Growth Fund. The Canada Growth Fund (CGF) announced its first investment on October 25, 2023, with a $90 million investment in Calgary’s Eavor…