Canadian Steel Producers…

Canadian Steel Producers Association Comments on “Discussion Paper: Regulating Commercial-Scale Geologic Carbon Storage Projects in Ontario” issued in July 2024

The Canadian Steel Producers Association (CSPA) hereby submits comments on the Ministry of Natural Resources’ (“MNR”) discussion paper on “Regulating Commercial-Scale Geologic Carbon Storage Projects in Ontario” (“Discussion Paper”).

The CSPA is the national voice of Canada’s $15 billion steel industry. Our members annually produce approximately 13 million tonnes of crude steel as well as over one million tonnes of steel pipe and tube products in facilities located across Canada. Domestic steel operations directly employ some 23,000 Canadians while supporting an additional 100,000 indirect jobs.

The CSPA supports the Ontario government’s efforts to develop a regulatory framework for commercial scale geologic carbon storage; which would be a new opportunity for Ontario and help the province in meeting its 2030 GHG reduction target. Carbon capture can aid the development of commercial scale geologic carbon storage projects, as well as support the production of low-carbon hydrogen while encouraging innovation and preserving high-value jobs as Ontario transitions to a lower-carbon economy.

It is recognized that Ontario is taking a measured and phased approach to enable and regulate geologic carbon storage in the province. While consultations have been and continue to be an important part of the regulatory framework development process, we encourage MNR to finalize the legislation and regulations to support carbon storage in Ontario swiftly. The safety and security of carbon storage activities must be prioritized, but their economic feasibility, including time-limited investment tax credits at their full value, must also be taken into account to meet the province's GHG reduction goals for 2030 and beyond.

CSPA hereby submits its recommendations on some key aspects of a commercial scale geologic carbon storage regulatory framework in Ontario:

Communication and Engagement:

While geologic carbon storage has been implemented safely and successful in many places around the world, CSPA recognizes that this technology is new in Ontario. As such, it is imperative that engagement with all interested stakeholders are provided with the opportunity to learn more about this technology. The Ontario government should work together with project proponents to ensure that stakeholders are provided with a comprehensive understanding of how the provincial government’s rules, when finalized, are designed to ensure safe, sustainable and long-term carbon storage.

Pore Space Rights:

In order for commercial scale geologic carbon storage projects to come to fruition in Ontario, it will be essential for the Crown to assume responsibility for both the vesting and allocation of pore space under both private and Crown lands. Proponents are already faced with substantial economic risk including the uncertainty related to carbon pricing and carbon credit and market values beyond the year 2030, which can affect the viability of such significant investment projects as carbon capture and geologic storage. With the Crown taking responsibility for vesting and allocation of pore space under private and Crown lands, it would also eliminate the risk of land speculators and/or land owners from blocking viable projects so that proponents are able to secure the necessary rights for commercial scale projects in a timely manner.

Long Term Liability:

When a carbon storage project is completed and closed in accordance with pre-established government requirements to ensure safety and security, the province needs to assume ownership of decommissioned projects and responsibility for long term. Third party insurance to address long term liability for commercial scale storage projects is not an economically viable option for commercial scale projects and could make geologic carbon storage untenable.

In summary, CSPA continues to support the Ontario government’s efforts to implement its phased approach to developing the regulatory framework for geologic carbon storage projects. We appreciate MNR’s efforts in leading this important work, and CSPA looks forward to continue working with the Ministry to help make this component of a lower-carbon economy come to fruition in a timely manner.