Leading universities worldwide are at the forefront of driving innovation to combat climate change and achieve net zero goals. Institutions like Oxford, Cambridge, Imperial College London, the University of Edinburgh, and the University of Aberdeen are pioneering groundbreaking solutions in CCUS technologies, policy frameworks, and integration strategies in the United Kingdom.
Learn how these research initiatives are shaping the future of sustainable energy and environmental stewardship.
Oxford University’s Carbon Management Program
Launched in December 2022, the Carbon Management Program at the Oxford Institute for Energy Studies (OIES) focuses on the in-depth examination of business strategies aimed at implementing groundbreaking low-carbon technologies essential for transitioning to a net zero world. Specifically, these technologies include carbon capture, utilization, and storage (CCUS) as well as carbon dioxide removal (CDR) solutions, spanning both technological and natural approaches.
The program scrutinizes the role of carbon markets, encompassing both voluntary and regulatory compliance mechanisms, in stimulating investments towards these transformative technologies. The Program’s research activities focus on 3 key thematic areas:
Carbon Capture, Utilization and Storage (CCUS):
The research segment examines the feasibility of CCUS in various sectors like oil & gas, steel, cement, and waste-to-energy. It provides insights into the economic, policy, and regulatory aspects of CCUS adoption.
Additionally, it assesses different policy support methods like tax incentives and carbon pricing to promote CCUS deployment. Comparative analyses with alternative decarbonization solutions in sectors like steel production (e.g., hydrogen adoption) and renewables are also conducted.
Carbon Dioxide Removal (CDR):
COP27 emphasized the importance of taking CO2 out of the air to meet the climate goals outlined in the Paris Agreement. Research in this area looks into various ways to do this, known as Carbon Dioxide Removal (CDR) solutions, to help us transition to cleaner energy and reach those targets.
CDR methods cover a wide range of techniques, so this research zeroes in on the most promising ones like direct air capture (DAC), bioenergy with carbon capture and storage (BECCS), and biochar production. It also explores newer solutions to see how practical and scalable they are.
Carbon Markets:
The third research area of the Program focuses on integrating CCUS and CDR solutions into both voluntary and mandatory carbon markets. Specifically, it offers solutions to significant challenges that have slowed down the progress of CCUS and CDR in voluntary carbon markets and emissions trading systems.
These solutions address various issues, including the need for robust carbon accounting frameworks, methods to ensure the permanence of carbon removal and to manage the risk of leakage or reversal, and assessments of the types of claims companies can make by investing in these solutions.
The University aims to achieve its own net zero carbon goal and biodiversity net gain by 2035, with the following pathway:
“Oxford Net Zero” Initiative
Oxford Net Zero is an interdisciplinary research effort drawing on 15 years of climate neutrality research at the University of Oxford. It is dedicated to monitoring progress, establishing standards, and guiding effective solutions across various fields including climate science, law, policy, economics, clean energy, transportation, land use, food systems, and CDR.
Essential climate change questions that Oxford Net Zero addresses include:
- How will carbon dioxide be distributed between the atmosphere, oceans, biosphere and lithosphere?
- Where will it be stored, in what forms, how stable will these storage pools be, who will own them and be responsible for maintaining them over the short medium and long terms?
- How does net zero policy extend to other greenhouse gases?
- How will the social license to generate, emit, capture, transport, and store carbon dioxide evolve over the coming century?
READ MORE: Oxford Revises Principles for Net Zero Aligned Carbon Offsetting
University of Cambridge Carbon Capture, Storage And Use Research
The University of Cambridge’s Carbon Capture, Storage, and Use (CCSU) research is part of the Energy Transitions@Cambridge initiative, an interdisciplinary research center dedicated to addressing current and future energy challenges. With over 250 academics from 30 departments and faculties, the initiative aims to develop solutions for energy transitions.
The CCSU research focuses on understanding and raising awareness of opportunities and risks associated with CCUS. Areas of focus include chemical looping of solid fuels to produce clean CO2, hydrogasification of coal to methane gas, reforming of methane to hydrogen, and seismological observations of active injection sites. On the use side, research covers manufacturing processes of CO2 and carbonate mineralization.
By bringing together academics and external partners, the university’s research program aims to explore cutting-edge technology themes in carbon capture for large-scale decarbonization.
Cambridge Zero, the University’s ambitious new climate initiative, will generate ideas and innovations to help shape a sustainable future – and equip future generations of leaders with the skills to navigate the global challenges of the coming decades.
The University made history by becoming the first university to adopt a science-based target for emissions reduction, aiming to limit global warming to 1.5 degrees Celsius. It plans to cut greenhouse gas emissions to zero by 2038.
To achieve this, Cambridge is exploring the substitution of gas with alternative heat technologies on a large scale and is progressively transitioning to renewable sources for its power supply. Watch below to learn more about the university’s climate initiative.
University Of Edinburgh CCS Research
The University of Edinburgh’s School of Engineering hosts one of the UK’s largest carbon capture research groups, focusing on carbon dioxide capture through adsorption and membrane separations. This group is part of the Scottish Carbon Capture and Storage (SCCS) Centre, the UK’s largest CCS consortium, which includes over 75 researchers from the University of Edinburgh’s Schools of Geosciences, Engineering, and Chemistry, Heriot-Watt University, and the British Geological Survey.
The Adsorption & Membrane group at the University of Edinburgh specializes in:
- Adsorbent Testing and Ranking: Using zero-length column systems to evaluate adsorbents for CO2 capture.
- Membrane Testing: Assessing polymers for carbon capture membranes.
- Molecular Modelling: Simulating novel nanoporous materials.
- Dynamic Process Modelling: Simulating adsorption and membrane-based capture technologies.
- Process Integration and Optimization: Enhancing efficiency of capture processes.
- Circulating Fluidised Beds: Studying fluid dynamics for improved carbon capture.
- Mixed-Matrix Membranes and Carbon Nanotubes: Developing advanced materials for capture applications.
This extensive expertise positions the University of Edinburgh as a leading institution in the research and development of carbon capture technologies.
Zero by 2040
The University has also committed to becoming zero carbon by 2040 as outlined in its Climate Strategy 2016. This strategy employs a comprehensive whole-institution approach to climate change mitigation and adaptation to achieve ambitious targets.
In alignment with the 2016 Paris Agreement, which aims to reduce global greenhouse gas emissions, the University is committed to supporting Scotland’s and the world’s transition to a low-carbon economy.
Key goals include reducing carbon emissions by 50% per £ million turnover from a 2007/08 baseline and achieving net zero carbon status by 2040. The University plans to achieve these objectives through initiatives in research, learning and teaching, operational changes, responsible investment, and exploring renewable energy opportunities.
Furthermore, the University will use its 5 campuses as “living laboratories” to experiment with and demonstrate innovative ideas that can be implemented elsewhere, fostering a culture of sustainability and practical application in the fight against climate change.
This year, the University is undertaking a major project to achieve carbon neutrality, which is considered the largest of its kind in the UK. This multimillion-pound initiative involves planting more than 2 million trees and restoring at least 855 hectares of peatlands. The project is a crucial part of the University’s goal of 2040 net zero.
Initial regeneration efforts will focus on a 431-hectare site overlooking the Ochil Hills in Stirlingshire and 26 hectares at Rullion Green in the Pentland Hills Regional Park near Edinburgh. Over the next 50 years, the project aims to remove 1 million tonnes of carbon dioxide from the atmosphere, equivalent to the emissions from over 9 million car journeys between Edinburgh and London.
Imperial College London – CCS Research Program
Imperial College’s carbon capture and sequestration (CCS) research program is the largest in the UK, involving over 30 professionals across various departments. They focus on engineering, industrial CCS, subsurface CO2 behavior, and legal and regulatory aspects. The university collaborates with the UK CCS Research Centre, CO2 GeoNet, and the European Energy Research Alliance.
The program has refurbished a pilot carbon capture plant to provide hands-on experience for students and professionals. Built to industry standards, it captures flue gas from a power station and supports research conducted by leading industrial organizations.
Imperial College London is also employing various means to directly curb its GHG emissions. The school’s long-term goal is to be a sustainable and net zero carbon institution by 2040.
ICL’s Transition to Zero Pollution
The Transition to Zero Pollution initiative is structured around 5 focus themes, each addressing a significant challenge that demands exploration, innovation, and interdisciplinary collaboration:
- Emerging Environmental Hazards and Health
- Resilient, Regenerative, and Restorative Systems
- Sustainable Resources and Zero Waste
- Urban Ecosystems: People and Planet
- Zero Pollution Mobility
Know more about ICL’s TZP initiative here.
University of Aberdeen’s Carbon Capture Machine
The University of Aberdeen is at the forefront of carbon capture and utilization research, with experts developing processes and products that not only sequester emissions but also add economic value.
In 2017, the university’s patented CO2 capture and conversion technology led to the establishment of Carbon Capture Machine Ltd (CCM), which became a finalist in the NRG COSIA Carbon XPrize competition, offering a $20 million prize to the winner.
CCM’s technology involves dissolving CO2 flue gas into slightly alkaline water, which is then mixed with a brine source containing dissolved calcium and magnesium ions. This process generates Precipitated Calcium Carbonate (PCC) and Precipitated Magnesium Carbonate (PMC), both of which are nearly insoluble and have various industrial applications.
PCCs are used in industries such as papermaking, plastics, paints, adhesives, and in the development of cement and concrete.
Additionally, sodium chloride (NaCl) is extracted from the final products. These carbon conversion products are carbon negative and in high demand across multiple industries, offering companies opportunities to reduce emissions and create new revenue streams through carbon capture and utilization technology.
Aberdeen’s Net Zero Goal
Same with the other top universities, the University of Aberdeen aims to reach net zero by 2040. As part of this climate commitment, the university became a member of the Global Climate Letter and the One Planet Pledge.
At a glance, here is the university’s carbon emissions, total and by scope, accessible through an online tool.
In addition to enhancing emissions reporting, the university is actively developing a comprehensive net zero strategy. This strategy includes setting targets and exploring pathways across various business functions to achieve carbon neutrality. The publication of this strategy will be available this year.
Conclusion
Leading universities in the UK are advancing carbon capture, utilization, and storage (CCUS) technologies, essential for achieving net zero goals. Oxford, Cambridge, Imperial College London, the University of Edinburgh, and the University of Aberdeen are driving research and implementation strategies that address the technical and economic challenges of CCUS.
Their interdisciplinary programs and climate initiatives integrate these solutions into broader carbon markets and regulatory systems. These universities’ efforts are crucial in transitioning to a sustainable energy future, demonstrating the critical role of academic institutions in global climate action. Through collaboration with industry and government, UK universities are setting the standard for climate action and paving the way for a net zero future.
The post How Top UK Universities Reduce Their Carbon Footprint to Reach Net Zero appeared first on Carbon Credits.
Across Europe, a quiet but decisive shift is reshaping how companies work with their suppliers. As the Corporate Sustainability Reporting Directive (CSRD) comes into force, large organisations are under mounting pressure to disclose detailed, verifiable sustainability information—not only about their own operations, but across their entire value chain. And because up to 80% of a company’s emissions often come from its supply chain, the spotlight naturally turns to SMEs.
Carbon Footprint
Lithium Prices Surge Amid Strong Demand Forecasts, Could Reach Up to $28,000/Ton by 2026
Disseminated on behalf of Surge Battery Metals Inc.
Lithium prices have jumped sharply overnight, catching the attention of investors, automakers, and battery makers. In China, lithium carbonate futures on the Guangzhou Futures Exchange hit about 95,200 yuan (≈$13,400 USD) per metric ton. This marks a rebound from earlier lows caused by oversupply.
Historically, lithium prices have been volatile. Peak prices reached around 150,000 yuan per ton in 2022, followed by a slump during the oversupply period in 2023–2024.
The recent spike followed comments from the chairman of Ganfeng Lithium, Li Liangbin, who projected a 30–40% rise in global demand by 2026. He suggested prices could reach between 150,000 and 200,000 yuan per ton if this growth materializes.
The surge highlights lithium’s critical role in powering electric vehicles (EVs) and large-scale energy storage.
Growing Demand for Lithium: What Drives the Boom?
Electric vehicles remain the largest driver of lithium demand. Around 16 million EVs were on the road globally in 2024, up from 10 million in 2022. Sales are forecast to exceed 25 million units by 2026 and reach over 50 million by 2030. Longer-range vehicles require larger batteries, which increases lithium use.
Energy storage systems are another fast-growing source of demand. Utilities expanding solar and wind energy need lithium-based batteries to store surplus electricity. Heavy-duty electric trucks and buses have larger batteries. This means they use more lithium per vehicle compared to passenger EVs.
Long-term trends toward decarbonization and renewable energy growth further support lithium demand. Analysts say that EV batteries make up about 70% of lithium demand. Grid storage accounts for 15%. Electric trucks use 10%, and other uses, like electronics and specialty chemicals, are around 5%.
Supply Challenges Keep Prices Elevated
Lithium carbonate prices in China have climbed dramatically, moving from $8,259/tonne on June 23, 2025, to $12,791/tonne on November 19, 2025 – a rise of about 55% over five months.
This recent rally is primarily attributed to tight supply conditions, with major Chinese mines, including those operated by CATL, pausing operations due to falling prices earlier in the year. As output was reduced or shut in, inventories were gradually drawn down, tightening available supply.
Moreover, lithium production is highly concentrated. Australia leads with around 60,000 tonnes LCE annually, followed by Chile (35,000 tonnes), China (25,000 tonnes), Argentina (18,000 tonnes), and the U.S. (≈5,000 tonnes). Geographic concentration adds risk: environmental regulations, political tensions, or operational issues could tighten supply.
Restarting idled mines or opening new projects takes 2–5 years. Inventories from the oversupply period act as a buffer. Current estimates show global lithium stocks at about 350,000 tonnes LCE. This amount can help with short-term supply issues, but it’s not enough for long-term growth.
- SEE live prices here: Live Lithium Prices Today
The factors that keep pushing lithium demand higher include:
- Electric vehicles,
- Energy storage systems,
- Electric trucks and buses, and
- Long-term climate trends.
Lithium makes up about 20–25% of total EV battery costs. So, price changes can greatly impact EV production costs. Also, battery chemistry trends show that sodium-ion and solid-state batteries might take a small share of the market by 2030. However, lithium-ion will remain the leader for now.
Lithium carbonate prices in China have climbed sharply, as shown in the chart. Prices rose more than 17% this month as investors bet on accelerating demand from the energy storage sector.
- MORE on LITHIUM:
What Analysts Say: Forecasts and Future Trends
Fastmarkets predicts a small surplus in 2025, shifting to a deficit of 1,500 tonnes LCE by 2026. A few years ago, the market had a surplus of about 175,000 tonnes in 2023 and 154,000 tonnes in 2024. Cuts in production at high-cost or marginal mines and rising demand from EVs and storage systems are driving this rebalancing.
Arcane Capital forecasts global demand could hit 4.6 million tonnes LCE by 2030, led by EVs, grid storage, and heavy-duty transport.
Benchmark Mineral Intelligence expects lithium carbonate prices to stay between $15,000 and $17,000 USD per ton in 2025, but prices may be lower in 2026 if supply increases faster than demand.
Still, the chart from Katusa Research highlights a growing deficit in lithium supply and demand. This supply deficit will likely underpin upward pressure on lithium prices moving toward 2030.
Production in Australia, China, and South America should grow by about 10% each year, per industry estimates. However, delays or cost overruns might slow this growth.
Risks to the Price Recovery
Lithium prices face several risks. EV adoption could slow if subsidies or incentives drop. Battery makers might adopt sodium-ion or other chemistries if costs rise. Rapid restarts of idled mines or new production could oversupply the market.
Regulatory hurdles, environmental restrictions, and trade tensions could also disrupt supply. Recent price spikes were partly due to speculative trading, highlighting the market’s sensitivity to sentiment.
Who Wins and Who Loses?
Higher lithium prices may hurt automakers and battery makers, pushing them to secure contracts or invest in recycling. Mining companies benefit from higher prices but must manage timelines and costs.
Meanwhile, investors have opportunities, though volatility is high. Policymakers consider lithium a strategic resource and are encouraging domestic production, recycling, and robust supply chains.
With global supply growth uncertain, focus is turning to projects that provide steady, long-term output. This is especially true in areas aiming to boost domestic supply chains, where Surge Battery Metals comes in.
Spotlight: Surge Battery Metals – US Lithium Hero
Surge Battery Metals (TSX-V: NILI | OTCQX: NILIF) is emerging as a key U.S. lithium developer. Its Nevada North Lithium Project (NNLP) hosts the highest-grade lithium clay resource currently reported in the United States, with an Inferred Resource of 11.24 million tonnes of lithium carbonate equivalent (LCE) grading 3,010 ppm lithium (NI 43-101, September 24, 2024).
A Preliminary Economic Assessment (PEA) on the project outlines robust economics, including:
- After-tax NPV₈%: US$9.21 billion
- After-tax IRR: 22.8%
- Low operating costs: US$5,243 per tonne LCE
NNLP benefits from access to regional infrastructure, including established roads and nearby power, supporting future development.
Surge’s leadership team includes veterans from Millennial Lithium, a company acquired for US$490 million in 2022. The company has also secured a staged C$10 million JV funding agreement with Evolution Mining to advance NNLP toward Pre-Feasibility while maintaining majority ownership.
How Nevada North Fits into the Global Picture
The Nevada North Lithium Project demonstrates the potential to become a globally significant lithium operation. According to comparative analysis from 3L Capital and S&P Global, NNLP’s Life-of-Mine (LOM) average production of 86 kt LCE per year—as outlined in the PEA—would rank the project as the 5th largest lithium-producing project in the world compared with 2024 producers and developers.
Even in its first year, NNLP is projected to produce 26 kt LCE, placing it among the top 16 lithium projects globally on a 2024 comparative basis. This combination of scale, grade, and location underscores NNLP’s potential as a strategic U.S. supply source in a market seeking domestic, high-quality lithium to reduce dependence on overseas imports.
If advanced through feasibility, permitting, and construction decisions, NNLP has the potential to become a competitive, American-based lithium operation—supporting both EV manufacturing and large-scale energy storage with “American-made” battery-grade feedstock.
Lithium Surges, Supply Matters, and America Prepares
Prices are shaped by several key factors. These include updates on production from major mines, trends in EV adoption, grid storage deployment, new battery technologies, and changes in policy. Inventory levels and market speculation will continue to influence short-term volatility.
Lithium prices have jumped, signaling a possible market turning point after past oversupply. High demand from EVs, grid storage, and heavy-duty transport, along with limited production and geographic concentration, is pushing prices up.
Industry stakeholders, investors, and policymakers have to monitor developments closely as lithium continues to play a central role in the global energy transition. Surge Battery Metals shows the type of domestic production needed to meet rising demand and strengthen supply chains in a rapidly evolving market.
DISCLAIMER
New Era Publishing Inc. and/or CarbonCredits.com (“We” or “Us”) are not securities dealers or brokers, investment advisers, or financial advisers, and you should not rely on the information herein as investment advice. Surge Battery Metals Inc. (“Company”) made a one-time payment of $50,000 to provide marketing services for a term of two months. None of the owners, members, directors, or employees of New Era Publishing Inc. and/or CarbonCredits.com currently hold, or have any beneficial ownership in, any shares, stocks, or options of the companies mentioned.
This article is informational only and is solely for use by prospective investors in determining whether to seek additional information. It does not constitute an offer to sell or a solicitation of an offer to buy any securities. Examples that we provide of share price increases pertaining to a particular issuer from one referenced date to another represent arbitrarily chosen time periods and are no indication whatsoever of future stock prices for that issuer and are of no predictive value.
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It is our policy that the information contained in this profile was provided by the company, extracted from SEDAR+ and SEC filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee them.
CAUTIONARY STATEMENT AND FORWARD-LOOKING INFORMATION
Certain statements contained in this news release may constitute “forward-looking information” within the meaning of applicable securities laws. Forward-looking information generally can be identified by words such as “anticipate,” “expect,” “estimate,” “forecast,” “plan,” and similar expressions suggesting future outcomes or events. Forward-looking information is based on current expectations of management; however, it is subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those anticipated.
These factors include, without limitation, statements relating to the Company’s exploration and development plans, the potential of its mineral projects, financing activities, regulatory approvals, market conditions, and future objectives. Forward-looking information involves numerous risks and uncertainties and actual results might differ materially from results suggested in any forward-looking information. These risks and uncertainties include, among other things, market volatility, the state of financial markets for the Company’s securities, fluctuations in commodity prices, operational challenges, and changes in business plans.
Forward-looking information is based on several key expectations and assumptions, including, without limitation, that the Company will continue with its stated business objectives and will be able to raise additional capital as required. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, or intended.
There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially. Accordingly, readers should not place undue reliance on forward-looking information. Additional information about risks and uncertainties is contained in the Company’s management’s discussion and analysis and annual information form for the year ended December 31, 2024, copies of which are available on SEDAR+ at www.sedarplus.ca.
The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management’s current beliefs and is based on information currently available to the Company. The forward-looking information is made as of the date of this news release, and the Company assumes no obligation to update or revise such information to reflect new events or circumstances except as may be required by applicable law.
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Carbon Footprint
Canada’s Carbon Pricing Reset in 2026: Will Industry Step Up or Stall Climate Progress?
Canada is at a key moment in its fight against climate change. Carbon pricing has been the central tool used to cut emissions, but recent policy changes and differences across provinces have created uncertainty.
This article examines how Canada’s carbon pricing system works now. It covers expert concerns and what the key federal review in 2026 might mean for both industry and the country’s journey toward a lower-carbon future.
How Canada Prices Pollution
Canada uses carbon pricing to encourage companies and people to cut greenhouse gas (GHG) emissions. Under that system, there are two main parts.
For ordinary people and small businesses, there used to be a “fuel charge” or carbon tax on fossil fuels. For large industrial emitters, there is a program called the Output-Based Pricing System (OBPS).
Under the OBPS, factories or facilities that produce a lot of emissions get a limit based on how much they produce. If they emit more than their limit, they must pay; if they emit less, they earn credits that they can sell or use later.
This approach aims to reduce carbon pollution while trying to protect industries that compete globally. The goal is to cancel out the risk that companies might move to other countries with weaker climate rules.
From Gas Pumps to Smokestacks: A Major Policy Shift
In 2025, the federal government made important changes. It removed the “consumer-facing” carbon tax — the fuel charge — effective April 1, 2025. This means people pay no extra carbon tax when buying gasoline or heating fuel.
Instead, the focus shifted more clearly onto industrial carbon pricing. The government said it would review the carbon pricing “benchmark” in 2026. This review could change how industrial carbon pricing operates.
A recent analysis by ClearBlue Markets shows that Canada’s carbon pricing for industry is now fragmented. Fragmentation has caused uncertainty. This is a problem for companies that need stable cost signals before they invest in cleaner technology.
The ClearBlue report stated:
“The federal benchmark review will therefore trigger extensive engagement between the federal government and the provinces, aimed at aligning key benchmark elements such as coverage, pricing stringency, and competitiveness protections. Negotiations are likely to be complex and politically charged, particularly with provinces like Alberta and Saskatchewan, which have already taken strong positions. These types of unilateral decisions reflect ongoing tensions and highlight the difficulty of achieving a truly aligned national approach.”
Carbon pricing today: A patchwork across Canada
Because Canada is large and its provinces have different rules, carbon pricing for industry is not the same everywhere. ClearBlue Markets shows that credit prices—what companies pay or earn—vary a lot by province or system.
Here are specific examples:
In Alberta, the Environmental Monitoring, Evaluation and Reporting Agency has seen a big drop in credits under its Technology Innovation and Emissions Reduction Program (TIER). Despite a compliance price of CAD 95 per tonne, market credits trade at around CAD 18 per tonne. This shows a credit surplus and weak demand.
In British Columbia (B.C.), the new B.C. Output-Based Pricing System (B.C. OBPS) began to be applied recently. Credits are trading at about CAD 65 per tonne, a discount compared with the regulatory level of CAD 80.
In Ontario, the Emissions Performance Standards (EPS) system governs industrial emissions. Because the program does not allow offset credits, supply is tighter — units (EPUs) recently traded at around CAD 72 per tonne.
In areas where the federal OBPS still applies, like some territories and small provinces, cheap carbon offset credits from Alberta’s TIER have lowered prices. Now, they can be as low as about CAD 37.50 per tonne.
The true cost of carbon emissions differs greatly by industry and province. The federal government aims to raise the carbon price to CAD 170 per tonne by 2030 for direct pricing systems.
The 2026 Showdown: Can Canada Fix Its Carbon Market?
The upcoming review of the federal benchmark is seen as a turning point. It could lead to stronger, more aligned carbon pricing across all provinces. As ClearBlue Markets notes, the review may address issues such as:
- Align different provincial systems under a common design. This way, credits and compliance will act more alike.
- Improving transparency in reporting credit inventories, trades, and emission reductions.
- Possibly introducing a “floor price” — a minimum cost for carbon credits — to avoid extreme price drops like those seen in some programs.
- Setting a long-term carbon price path past 2030 helps industries plan investments more clearly. This is especially important for clean technologies.
All of these could make carbon pricing more predictable and effective. If the review doesn’t meet expectations, patchwork and uncertainty may persist. This could weaken the carbon price signal and confuse investment in clean technology.
This patchwork of provincial and federal carbon pricing programs has created a corresponding patchwork of compliance offset markets. The image below shows how these offset markets are distributed across Canada.
Global Pressure Is Rising: Europe Could Hit Canada with Carbon Tariffs
One major external risk comes from the global trade environment. Starting in 2026, the European Union’s Carbon Border Adjustment Mechanism (CBAM) will impact imports based on their carbon emissions.
For Canadian exporters, this raises a key question:
- Will EU authorities accept the compliance credits or offsets generated under Canada’s various carbon pricing systems as evidence of “carbon price paid”?
If not, Canadian exports might face extra tariffs. This could double the carbon cost or hurt competitiveness.
This makes it even more important for Canada to standardize and strengthen its carbon pricing framework before 2026. This is to ensure that its pricing and credits are recognized internationally. Otherwise, Canadian industries like steel, aluminum, and cement might find it hard to compete. This is especially true in markets with strict climate-related import rules.
Strengths and Challenges of Canada’s Carbon Pricing
Carbon pricing works to link environmental costs with economic decision-making. For large emitters, it encourages improved efficiency. Carbon pricing revenue, especially from the OBPS, can fund clean energy projects. It also supports carbon capture and investments in low-carbon infrastructure.
A recent evaluation by the government highlights that industrial carbon pricing helps reduce emissions with minimal impact on households.
But there are major challenges too. The system varies by province, so many industries might have low carbon costs. This means there is little motivation for real change.
A 2022 report from the Office of the Auditor General of Canada (OAG) found that weak rules in provincial large-emitter programs lower the impact of carbon pricing. Also, the unclear use of carbon revenues and the long-term price outlook have made some firms hesitant to invest in cleaner technologies.
The Stakes: Canada’s Climate Credibility and Industrial Future
The 2026 benchmark review could reshape Canada’s carbon pricing for decades. Key signs to watch are:
- Whether the government sets a new, clear carbon price path beyond 2030 — possibly up to 2050, that would give firms confidence to invest in long-term clean solutions.
- Whether provincial carbon pricing systems become more harmonized. This means similar rules, credit prices, and transparency everywhere.
- Introducing a price floor or other methods can help prevent deeply discounted carbon credits. This ensures a strong carbon price signal.
- Will Canadian industrial credits and compliance be set up to gain recognition under global systems like CBAM? This could help keep Canadian exports competitive.
Canada’s carbon pricing, especially for industry, is at a crossroads. The removal of the consumer carbon tax in 2025 reflects a shift toward focusing on industrial emissions. Meanwhile, the upcoming 2026 benchmark review offers a chance to make this system stronger, fairer, and more predictable.
However, much depends on political and regulatory will. Without clear pricing, rules, and long-term certainty, the carbon price might be too weak. This puts Canada’s climate goals and global competitiveness at risk. But if the government and provinces act quickly, carbon pricing can help Canada shift to a low-carbon economy while also keeping industries competitive.
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