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

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.

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.

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.

Application Steps

Required Documents 6

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

Claim timing

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. The Spring 2026 Economic Update added Enhanced Oil Recovery as an eligible use at half rates (30%/25%/18.75%).

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

Compatible Programs

Clawback Risk

Medium Risk