Canada Opens the Floodgates for Carbon Capture Projects

Ottawa launches rolling funding for carbon capture engineering, helping projects move from planning to construction faster across Canada

9 Mar 2026

Canada has opened a new federal funding programme aimed at helping carbon capture projects complete the engineering work required before construction, in an effort to accelerate development of its carbon capture, utilisation and storage (CCUS) sector.

Natural Resources Canada (NRCan) launched a dedicated call for Front-End Engineering and Design (FEED) proposals on February 16, 2026. The initiative, delivered through the government’s Energy Innovation Program, offers between C$3mn and C$7mn per project and will cover up to 50 per cent of eligible costs.

Projects led by Indigenous groups can receive stronger support, with federal funding covering as much as 75 per cent of costs.

The call will operate on a rolling basis without a fixed deadline. Applications will be reviewed as they are submitted, with funding available from April 1, 2026.

FEED studies represent a critical phase in industrial projects, providing detailed technical and cost planning before construction begins. Governments and developers often view this stage as a key hurdle because of its cost and risk.

The programme builds on an earlier NRCan funding round that allocated up to C$50mn for similar work. That support helped advance several projects, including Heidelberg Materials’ planned net-zero cement facility in Edmonton.

The latest call comes as Canada expands broader support for carbon capture infrastructure. In November 2025, Ottawa and Alberta agreed to link future oil sands production growth to emissions reduction milestones. Alberta has also introduced its Carbon Capture Incentive Program, which is expected to provide billions of dollars in capital grants through 2035.

Projects supported under the federal programme will be required to share knowledge on development costs and project design. The government says this is intended to help reduce barriers for future projects across industries such as cement, chemicals, power generation and hydrogen.

The scheme excludes projects involving enhanced oil recovery and may also disqualify projects that have already received NRCan funding.

Officials say the programme is intended to move more projects from early planning into construction, as Canada seeks to expand large-scale carbon capture capacity across its industrial sectors.