Alberta is undercutting investment and creating uncertainty for business by indefinitely freezing its industrial carbon price, the Canadian Climate Institute said Monday, after Premier Danielle Smith announced she was capping the price at $95 per tonne of emissions effective immediately.
"Alberta is home to billions of dollars of decarbonization projects that are banking on the existing system, and up to another $5 billion in carbon credits," Institute Executive Vice President Dale Beugin said in a release. "A frozen price undermines the assumptions on which all these investments were made. That's costly for existing projects and also undermines confidence and investment in future low-carbon projects."
On Monday, Smith told reporters the price freeze is critical to keep industry competitive and defend jobs as Canada navigates a tariff fight with the United States, The Canadian Press reports.
"With the change in government south of the border, it is essential that we have a reasonable carbon pricing system, not one that will price our industries out of global markets," she said.
"We are providing certainty, stability, and economic relief to the businesses that contribute so much to all of Canada. And we are supporting the energy producers whose expertise and innovation are quite literally shaping the world's energy future."
The price had been set to rise to $110 per tonne in 2026 and was to continue increasing to $170 per tonne by 2030, CP writes.
Environment Minister Rebecca Schulz said going over $100 a tonne would make the province "wildly uncompetitive," CP writes. She said the freeze doesn't mean Alberta is giving up on its emission reduction goals.
But Beugin said the industrial carbon price costs a maximum of 30 per barrel of oil, based on an approach that is "already designed to minimize costs and competitiveness impacts." Industrial carbon pricing systems "create incentives to reduce emissions by improving performance, not by reducing investment or production," he added, but they're "only effective when investors and markets have certainty."
While "there are other, better options for protecting competitiveness, like returning more revenue generated from the policy to industry," Beugin said, "freezing Alberta's industrial carbon price is a mistake and the government should reconsider."
Segments of this story were published by The Canadian Press on May 12, 2025.
Source: The Energy Mix
