Carbon Capture Moves From Compliance to Market Strategy

Rising carbon costs and buyer demands are turning carbon capture into a competitive tool for Canadian industry

5 Feb 2026

Canada’s heavy industrial companies are beginning to treat carbon capture less as a compliance measure and more as a strategic investment tied to future markets and competitiveness.

Across cement, energy and clean technology, carbon capture, utilisation and storage is increasingly shaping how companies plan new projects and capital spending. Most initiatives remain at an early stage, ranging from advanced pilots to first commercial deployments. But the focus is shifting beyond emissions cuts to protecting access to customers that are asking for proof of lower carbon footprints.

Federal support has helped accelerate the trend. Tax credits and direct funding have reduced financial risk and allowed more projects to approach final investment decisions. Industry participants say, however, that policy incentives alone do not explain the change in approach.

“This is no longer just about meeting regulations,” said a senior analyst at a Canadian energy research group. “Carbon capture is starting to shape growth plans, cost structures, and how products are positioned for future markets.”

Project pipelines show how this thinking is being applied. Heidelberg Materials is advancing a carbon capture project at its Edmonton cement plant, with operations targeted later this decade. The company aims to supply lower-carbon cement to construction firms that are increasingly required to disclose emissions data during procurement, particularly for large infrastructure projects expected to move ahead after 2026.

Carbon utilisation is also drawing interest, though at smaller scale. Companies such as Carbon Upcycling are working with materials producers to use captured carbon in cement additives and other inputs. Volumes remain modest, but customers are testing the products as a way to reduce emissions without compromising performance.

Collaboration is becoming more common. Rather than building full capture, transport and storage systems on their own, companies are forming partnerships across the value chain. Analysts expect joint ventures to increase as projects move from demonstration to early commercial deployment.

Obstacles remain significant. Carbon capture requires high upfront capital, customer willingness to pay a premium varies, and standards for defining low-carbon products are still developing. Industry groups and governments are working to clarify how emissions reductions should be measured and verified.

Even so, the direction of travel is clear. As carbon prices rise and customer expectations become firmer, carbon capture is moving closer to the industrial mainstream. For Canadian producers, early investment may help determine who remains competitive as low-carbon products become standard later this decade.