Capital and Carbon: Alberta Rewrites the Rules

Alberta's draft protocol expands storage options, formalizes hub accounting, and adds new compliance credits under TIER

8 Jun 2026

For years, Alberta’s carbon-capture ambitions have resembled a pipeline without pressure. The province sits atop vast geological formations perfectly suited to bury greenhouse gases, yet developers have hesitated to invest. On May 27th, provincial regulators published a long-overdue draft overhaul of their carbon-accounting rules, replacing a framework unchanged since 2015. The update attempts to resolve the regulatory uncertainty that has stalled billions of dollars in potential investments.

The draft expands the permitted options for permanent storage. Rather than limiting developers to deep saline aquifers, it now allows operators to pump carbon into depleted oil and gas fields. More importantly, it clarifies how a "hub-and-spoke" network operates. Previously, a single pipeline network gathering carbon from multiple industrial plants lacked a clear system to track who owned which credit. The new rules explicitly define how separate firms can share transport systems and central storage sites, providing the legal clarity that infrastructure developers have demanded.

In an effort to catch up with global trends, the framework also creates a new category of "removal credits" for novel technologies. These include direct air capture, which sucks carbon straight from the atmosphere, and biomass energy with carbon storage. Yet the provincial government has stopped short of giving these new credits extra financial value under its heavy-emitter trading system, leaving their commercial viability unclear.

Predictably, the rules have exposed familiar trade-offs. The Pembina Institute, a think-tank, welcomed the hub-accounting changes. Calling them central to attracting future investment and decarbonizing existing Alberta industry, the group also flagged that the current grid-intensity approach for electricity fails to reflect low-carbon power purchased through market mechanisms such as virtual power purchase agreements. Meanwhile, fossil-fuel firms are frustrated that enhanced oil recovery, which is the practice of using carbon to pump out remaining oil reserves, remains banned from generating credits, even when the carbon stays permanently underground.

A public consultation on the draft runs until June 26th. Alberta is discovering that digging a hole to bury carbon is the easy part; the real challenge lies in designing the market bureaucracy to fill it.