(Calgary) Shell Canada says it is implementing its Polaris carbon capture project in Alberta.

The company – the Canadian subsidiary of British multinational Shell PLC – announced on Wednesday that it had made a positive investment decision in the project, designed to capture approximately 650,000 tonnes of carbon dioxide per year from the refinery and complex Scotford Chemical Company, owned by Shell, near Edmonton.

Shell did not disclose the financial value of the Polaris project, but indicated that it is expected to begin operations around the end of 2028.

Shell also announced on Wednesday that it would continue the Atlas Carbon Storage Hub project in partnership with ATCO EnPower. The first phase of Atlas, which will be connected to the Polaris project by a 22 km pipeline, will provide permanent underground storage of CO2 captured by the Polaris project.

Polaris is Shell’s second carbon capture and storage project in Canada. Its first, named Quest, was completed in late 2015 and is also located in the Scotford complex.

The project, which cost $1.3 billion to build, has captured and stored around 1 million tonnes of CO2 per year from the Scotford upgrader since 2015, Shell said.

Shell’s decision to greenlight the Polaris project comes just days after a new federal investment tax credit for carbon capture and storage received royal assent.

This tax credit was first announced in 2022, but its recent finalization means businesses can now apply for and claim the credit to offset the capital costs of building carbon capture facilities.

“It [the tax credit] was a key part of the decision [concerning Polaris],” said Shell Canada president Susannah Pierce.

Carbon capture and storage, which involves capturing and compressing harmful CO2 emissions from industrial processes and then storing them safely underground, is considered by many to be the best way to decarbonize highly polluting industries such as as the production of oil, gas and cement.

But this technology is very expensive and companies are reluctant to invest money in it without significant support from governments.

Canada’s largest proposed carbon capture project, a $16.5 billion proposal put forward by a group of oilsands companies called the New Pathways Alliance, has yet to receive an investment decision.

Pierce said every project is different, but in Shell’s case, Polaris is a “key part” of the company’s overall decarbonization strategy.

“We are committed to decarbonizing our Scotford facility, we have experience in CCS [carbon capture and storage] from our years of operating the Quest facility,” she highlighted in interview.

“With the right combination of tax framework and regulation, we were able to compare the CCS alternative to all other solutions to meet our compliance obligations, and it worked,” she said. added.