Updated March 2026 · Verified against Canada Revenue Agency (CRA) guidelines
▲ Growing Tax Credit Offset Est. 2022
Tax Credit Federal Active

Carbon Capture, Utilization, and Storage Investment Tax Credit (CCUS ITC)

Canada Revenue Agency (CRA)
Maximum Funding
37.5%–60% refundable tax credit (60%...
Ongoing (retroactive to January 1, 2022; full rates to 2035 per Budget 2025)
Visit Official Program →
Difficulty
Hard
Payment
Tax Credit Offset
Trend
Growing
First-Timers
—
Co-Funding
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. Applications are accepted on an ongoing basis. (As of March 2026, verified against Canada Revenue Agency (CRA) program guidelines)

Eligibility & Details

What this program funds and who can apply

Free

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
  • CCUS project plan must be registered with CRA
  • Must meet knowledge-sharing requirements (publish results)
Provinces
All Provinces
Industries
Renewable Energy Clean Technology Environmental Industrial Manufacturing
Business Stage
Established Expansion

Quick Assessment

Difficulty
Hard
Competition
Low
Est. Hours
150h
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
Co-Funding
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

Hybrid
Competition
Low
Effort
~150 hours
Approval
Entitlement
Accessibility
--/5
Competition
--/5
Approval Rate
--%
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What's in this Playbook

Everything you need to win Carbon Capture, Utilization, and Storage I... — $19

Not a marketing summary. The actual checklist, intel, and stack strategy reviewers look for.

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How to Win

Insider tips, common pitfalls, and what successful applicants look like

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Insider Tip

Direct air capture equipment gets the full 60% rate — one of the most generous tax credits in Canadian history. Budget 2025 extended full rates by 5 years to 2035, giving more runway. The knowledge-sharing requirement means you must publish results, but the credit value far outweighs this. Get the CCUS project plan registered early.

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Success Profile

A mid-size Alberta industrial company investing $5M in carbon capture equipment for its manufacturing facility, claiming $2.5M in refundable tax credits (50% rate for non-DAC capture). Also applicable to concrete producers using captured CO2, food-grade CO2 suppliers, and greenhouse operators using CO2 enrichment.

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Evaluation Criteria

Entitlement-based — not competitive. Any taxable Canadian corporation with a qualifying CCUS project meeting the legislative requirements can claim the credit. NRCan evaluates the technical eligibility of the CCUS project plan (process must meet the legislated definition of a CCUS process). CRA verifies the tax claim. No merit-based competition or scoring. The barriers are technical and administrative, not competitive.

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Common rejection pitfalls, what winners look like, and exactly what reviewers score on
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Application Playbook

Step-by-step process, required documents, and expenses

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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.
2 Register CCUS Project Plan with NRCan Submit your CCUS project plan to NRCan through their secure portal. NRCan reviews and verifies that the process described meets the legislated definition of a CCUS process. This results in an Initial Project Evaluation — required by CRA before any ITC claim can be filed.
3 Elect Labour Requirements (Recommended) Decide whether to meet labour requirements (prevailing wage and apprenticeship). Electing labour compliance gives full credit rates. Not electing reduces all rates by 10 percentage points (e.g., 60% becomes 50% for direct air capture). Ensure all covered workers at designated work sites are paid according to eligible collective agreements.
4 Incur Eligible Capital Expenditures Purchase, install, and commission eligible CCUS equipment (capture, transport, storage, or use). Ensure equipment is situated in Canada and used solely for CCUS purposes. Track expenditures by equipment category for rate differentiation.
5 Claim CCUS ITC on T2 Corporate Tax Return File the CCUS ITC schedule as part of your annual T2 corporate tax return. Apply the appropriate rate to each equipment category. Deadline: later of December 31, 2026 and one year from the filing due date of the applicable tax year (per Bill C-15 extension).
6 Comply with Knowledge Sharing (if applicable) If your project has $250M+ in qualified CCUS expenditures, submit five annual knowledge sharing reports to NRCan beginning June 30 of the year following your project start-up date. Reports are published publicly.

Required Documents 6

✓ Registered CCUS project plan with CRA
✓ T2 corporate tax return with CCUS ITC schedule
✓ Engineering reports on CO2 capture capacity and eligible use
✓ Capital expenditure documentation for eligible equipment
✓ Labour compliance records
✓ Knowledge-sharing commitment documentation

Eligible Expenses 8

  • Carbon capture equipment for direct air capture (60% rate)
  • Other carbon capture equipment for point-source capture (50% rate)
  • CO2 transportation equipment including pipelines and compression systems (37.5% rate)
  • Dedicated geological storage equipment and injection systems (37.5% rate)
  • Equipment for eligible CO2 use in concrete production in Canada or the US (37.5% rate)
  • Dual-use equipment with qualifying CCUS components (proportional claim)
  • Front-End Engineering and Design (FEED) study costs related to CCUS equipment
  • Refurbishment costs (limited to 10% of development-phase expenditures)

Ineligible Expenses 5

  • Equipment used for enhanced oil recovery (EOR)
  • Equipment for natural gas processing or acid gas injection
  • Construction equipment, furniture, and office materials
  • Property already claimed under another clean economy ITC (Clean Technology ITC, Clean Hydrogen ITC) — cannot stack multiple ITCs on the same property
  • Expenditures where less than 10% of captured CO2 is used in an eligible manner

Intake Periods

Ongoing — no intake periods. Retroactively available from January 1, 2022. Full credit rates through 2035 (Budget 2025 extension). Reduced rates 2036-2040. Program ends December 31, 2040. Claim filing deadline: later of December 31, 2026 and one year from filing due date (Bill C-15).

Deadline Notes

Retroactively available from January 1, 2022. Full rates maintained through 2035 (Budget 2025 extended by 5 years). Phase-down rates from 2036-2040. Register your CCUS project plan early to ensure eligibility before major capital expenditures.

Open Application Portal →

Ineligible Organizations

  • Non-incorporated entities (individuals, partnerships without corporate partners filing)
  • Non-taxable entities (Crown corporations, tax-exempt organizations)
  • Foreign corporations without taxable Canadian presence
  • Organizations using captured CO2 primarily for enhanced oil recovery
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Funding Stack Strategy

Compatible programs, clawback risk, and combined funding potential

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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

Free
Program Amount Difficulty Payment Deadline
Carbon Capture, Utilization, and Stor... 37.5%–60% refundable tax credit Hard Tax Credit Offset Ongoing (retroactive to...
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Strategic Response Fund (formerly Str... Up to $50 million Hard Mixed (Advance + Reimb.) Ongoing — continuous...
CanExport SMEs Up to $50,000 Moderate Mixed (Advance + Reimb.) Next deadline: May 29,...
Ontario Innovation Tax Credit Up to 8% tax credit Moderate Tax Credit Offset Ongoing

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Frequently Asked Questions

Quick answers to the questions founders most often ask about Carbon Capture, Utilization, and Storage I...

Free
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?
Projects must capture at least 10% of CO2 for eligible use (dedicated storage or industrial use). Smaller projects may not meet the threshold for the credit.
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: project plan not registered with CRA, less than 10% CO2 captured for eligible use, or missing knowledge-sharing documentation (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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