Tax Credit
Federal
Active
Carbon Capture, Utilization, and Storage Investment Tax Credit (CCUS ITC)
Canada Revenue Agency (CRA)
Maximum Credit
37.5%–60% refundable tax credit (60% direct air capture; 50%...
Ongoing (retroactive to January 1, 2022; full rates to 2035 per Budget 2025)
Difficulty
Hard
Payment
Tax Credit Offset
Trend
Growing
First-Timers
—
Credit rate
60%
Carbon Capture, Utilization, and Storage Investment Tax Credit (CCUS ITC) provides up to 37.5%–60% refundable tax credit (60% direct air capture; 50% other carbon capture equipment; 37.5% transport, storage, and use). Refundable investment tax credit ranging from 37.5% to 60% for taxable Canadian corporations with qualified carbon capture, utilization, and storage projects. Applications are accepted on an ongoing basis.
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Eligibility & Details
What this program funds and who can apply
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Program Description
Refundable investment tax credit ranging from 37.5% to 60% for taxable Canadian corporations with qualified carbon capture, utilization, and storage projects. The highest rate (60%) applies to direct air capture equipment. Covers eligible carbon capture, transport, storage, and use equipment for projects capturing at least 10% of CO2 for eligible use (dedicated geological storage or specified industrial use). Budget 2025 extended full rates by 5 years to 2035.
Eligibility Requirements
- Taxable Canadian corporation
- Qualified CCUS project capturing at least 10% CO2 for eligible use (dedicated geological storage or qualified concrete storage; enhanced oil recovery is not an eligible use)
- Initial project evaluation must be issued by NRCan before any claim can be filed
- Project must be expected to support CO2 capture for at least the CCUS project review period (approximately 20 calendar years) — temporary pilot or demonstration projects do not qualify
- Must meet knowledge-sharing requirements (publish results) if the project has $250M+ in qualified CCUS expenditures
Provinces
Industries
Business Stage
Quick Assessment
Difficulty
Hard
Competition
Low
First-Timer
Not rated
Funding Details
- Amount
- 37.5%–60% refundable tax credit (60% direct air capture; 50% other carbon capture equipment; 37.5% transport, storage, and use)
- Type
- Tax Credit
- Level
- Federal
- Credit rate
- Up to 60% of eligible costs
- Deadline
- Ongoing (retroactive to January 1, 2022; full rates to 2035 per Budget 2025)
Program Scorecard
Competition, effort, and approval at a glance
Competition
Low
Deadline
Dec 31, 2040
Approval
Entitlement
Accessibility
--/5
Competition
--/5
Approval Rate
--%
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What's in this Playbook
Everything you need to claim Carbon Capture, Utilization, and Storage I...
Not a marketing summary. The actual checklist, intel, and stack strategy reviewers look for.
- 6-document checklist with what each reviewer is actually checking
- 6-step application timeline with prep hours per step
- Insider tip from program officers on what separates winners
- 5-program stacking strategy to combine with compatible funding
- Success profile + evaluation criteria — exactly what the program administrators check
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How to claim
Insider tips, common pitfalls, and what successful applicants look like
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Insider TipDirect air capture equipment gets the full 60% rate — one of the most generous tax credits in Canadian history.
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Success Profile
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Evaluation Criteria
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Common rejection pitfalls, what successful claimants look like, and exactly what the program administrators check
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Application Playbook
Step-by-step process, required documents, and expenses
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6 steps
6 docs
Application Steps
1
Complete Front-End Engineering and Design (FEED) Study Conduct a FEED study for your CCUS project, establishing the technical parameters, CO2 capture capacity, eligible use pathway (dedicated geological storage or concrete production), and capital expenditure estimates.
Required Documents 6
✓ Registered CCUS project plan with CRA
✓ T2 corporate tax return with CCUS ITC schedule
Eligible Expenses 8
Ineligible Expenses 5
Claim timing
Deadline Notes
Ineligible Organizations
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Funding Stack Strategy
Compatible programs, clawback risk, and combined funding potential
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5 partners
Compatible Programs
Clean Technology ITC
SR&ED Tax Credits
Provincial Carbon Pricing Rebates
Emissions Reduction Alberta (ERA)
NRCan Energy Innovation Program
Combined Funding Potential
See your total funding potential
Clawback Risk
Medium Risk
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How Carbon Capture, Utilization, and Storage I... Compares
Side-by-side with similar programs
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| Program | Amount | Difficulty | Payment | Deadline |
|---|---|---|---|---|
| Carbon Capture, Utilization, and Stor... | 37.5%–60% refundable tax credit | Hard | Tax Credit Offset | Ongoing (retroactive to... |
| Emissions Reduction Alberta (ERA) — I... | up to $15,000,000 | Hard | Reimbursement | 2026 round closed —... |
| Energy Innovation Program | Up to $4 million | Hard | Reimbursement | Call-specific deadlines... |
| Strategic Response Fund (formerly Str... | Minimum $10 million contribution | Hard | Mixed (Advance + Reimb.) | Ongoing — continuous... |
| CanExport SMEs | Up to $50,000 | Moderate | Mixed (Advance + Reimb.) | Applications accepted... |
Related Programs
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Frequently Asked Questions
Quick answers to the questions founders most often ask about Carbon Capture, Utilization, and Storage I...
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Can sole proprietors claim this tax credit?
No — only taxable Canadian corporations qualify. Sole proprietors must incorporate to apply. The credit requires corporate tax filing and refundable credit eligibility.
What's the minimum project size to qualify?
No dollar threshold is published. The binding test is that at least 10% of the captured CO2 must go to an eligible use (dedicated geological storage or an approved industrial use), and NRCan must issue an initial project evaluation.
How long does CRA take to process the credit?
Processing time varies — typically 3-6 months for standard claims. Retroactive claims (post-2022) may take longer due to review complexity.
Why do applications fail most often?
Common failures: no initial project evaluation issued by NRCan, less than 10% of captured CO2 going to an eligible use, or missing knowledge-sharing documentation on projects large enough to owe it (e.g., no public report).
Can I stack this with other programs?
Yes — stack with Clean Technology ITC (for renewable energy powering CCUS), SR&ED (for R&D), and provincial carbon rebates. Each program covers different costs.
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Full Playbook: Carbon Capture, Utilization, and Storage I...
6 steps · 6 docs · reviewer insights