Ottawa, Ontario - Department of Finance Canada
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, welcomed the announcement of the Canada Growth Fund's fourth investment.
Through its second carbon contract for difference, the Canada Growth Fund is supporting Varme Energy Inc.-an Edmonton-based developer of waste-to-energy facilities with integrated carbon capture and storage. In partnership with Gibson Energy Inc., Varme is seeking to develop Canada's first waste-to-energy project with carbon capture and storage in the Heartland-area.
As part of this innovative transaction structure, the Canada Growth Fund would purchase up to 200,000 tonnes per year of carbon credits for 15 years at an attractive initial price of $85 per tonne plus escalation. A form of carbon contracts for difference, carbon credit offtake agreements de-risk emissions-reducing investments by guaranteeing the purchase of carbon credits for abated emissions at a fixed price.
In January, the City of Edmonton awarded Varme a 15-year contract to collect and process 200,000 tonnes per year of municipal solid waste beginning in 2027. The new, sustainable project will integrate carbon capture technology to safely and cleanly incinerate waste and produce affordable clean electricity, all while creating well-paying jobs for Albertans, lowering home energy costs, diverting waste from landfills, and reducing emissions.
Waste-to-energy with carbon capture has significant potential to be scaled-up for use in cities across Canada, and secures Canada's position as a global carbon capture leader.
Beyond Varme's inaugural Edmonton project, the Canada Growth Fund will also have the opportunity to participate in future Canadian projects using Varme's integrated carbon capture technology and waste-to-energy approach. This will de-risk and accelerate private carbon capture investment across Canada by establishing carbon price certainty for carbon capture projects.
In Budget 2024, the government announced further action to grow the economy and create good-paying jobs today and for the next generation, including by expanding the Canada Growth Fund's carbon contract for difference offerings to new markets. Through initiatives like Canada Growth Fund, the government is empowering entrepreneurs and innovators to turn their ideas into success stories, helping to unlock a brighter, more prosperous future.
