Canada’s Prime Minister and the premier of Alberta have entered into a landmark Implementation Agreement on industrial carbon pricing, as part of a wider framework intended to support the construction of a 1 mb/d bitumen pipeline linking Alberta to the northwest coast of British Columbia (Canadian Federal Government statement, 15/05/2026).
The agreement stipulates that the province of Alberta will present a detailed proposal by 1 July 2026 for a new bitumen export pipeline serving Asian markets and designed to transport at least 1 mb/d of bitumen. The federal government plans to classify the project as being of national interest by 1 October 2026. The pipeline project will rely on the Pathways Project, described as the world’s largest carbon capture, utilisation, and storage (CCUS) development. The project is expected to deliver 16 Mt/year of CO2 emissions reductions. Any pipeline reaching the West Coast would also require approval from British Columbia as well as from the First Nations whose territories could be impacted by the proposed route.
Additionally, the agreement will raise the effective carbon credit price within Alberta’s industrial carbon market to CAD130 (USD95) per metric ton by 2040. Canada and Alberta have agreed upon annual benchmarks for the headline carbon price, including CAD115 (USD84) by 2030 and CAD130 by 2035, upon annual tightening, or “stringency” rates under the Technology Innovation and Emissions Reduction (TIER) system, and upon enforcing a minimum floor price for TIER credits beginning in 2030.
In May 2025, Alberta decided to freeze its benchmark industrial carbon price, arguing that the measure was necessary to preserve the competitiveness of local companies amid economic pressure stemming from US tariffs. Carbon credits in Alberta’s market currently trade at between CAD20 and CAD40 (USD14.5-29) per metric ton, levels that environmental specialists consider insufficient to encourage emitters to invest in emissions reduction technologies (Reuters, 15/05/2026).
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