Why a tonne of industrial carbon costs $95 in Alberta but credits sell for less than $20

⭐ Join our community and access the best we offer!

illuminem breaks down key takeaways for you on the news. Read the full piece on CBC News or enjoy below:

🗞️ Driving the news: The carbon credit pricing system in Alberta is causing confusion and conflict between provincial and federal governments
• While Alberta’s carbon pricing for large emitters is $95 per tonne, carbon credits are trading at under $20. The government is now working toward a new goal of raising this price to $130 per tonne, but how to bridge the gap remains an open question

🔭 The Context: The debate stems from Alberta’s industrial carbon pricing system, where large emitters can buy carbon credits to offset their obligations
• The current low price of these credits, due to oversupply and reduced demand from renewable energy growth, undermines the effectiveness of carbon pricing in incentivizing emissions reduction
• The Canadian federal government and Alberta have reached a memorandum of understanding (MOU) with aims to boost these prices, but achieving this goal will be complex

🌍 Why it matters for the planet: This carbon pricing issue has significant environmental implications
• A higher credit price could encourage industry to adopt carbon capture methods and more sustainable practices, potentially boosting Canada’s climate targets
• However, inconsistencies between the provincial and federal frameworks could slow progress and weaken the overall effectiveness of the policy

⏭️ What’s Next: The specifics of how to meet the $130 per tonne target will be hashed out by April 2026
• This will involve potentially adjusting carbon benchmarks and increasing market demand through financial mechanisms, which could lead to significant changes in Alberta’s carbon capture strategies

💬 One Quote: “If you really want to do climate policy, you can totally do it with carbon pricing and it can completely work,” said Sara Hastings-Simon, professor at the University of Calgary, emphasizing the importance of detail in making carb on pricing an effective tool for climate action.

📈 One Stat: Carbon credits in Alberta are currently trading for less than $20 per tonne, despite the $95 per tonne headline price. This discrepancy highlights the challenges of achieving real emissions reductions under the current system

See on illuminem's Data Hub™ the sustainability performance — carbon credit purchases, total emissions, and climate targets of thousands of companies

Click for more news covering the latest on carbon market