Alberta Spends $5 Million to Support World’s First Direct Air Carbon Capture Centre

Would Trees Be Cheaper?

Alberta spends $5 million to support the world’s first direct air carbon capture centre Courtesy GoA.

Alberta is making headlines with a $5 million investment from its Technology Innovation and Emissions Reduction (TIER) fund to support what’s being billed as the world’s first direct air carbon capture (DAC) innovation and commercialization centre. The project, led by Montreal-based startup Deep Sky in Innisfail, Alberta, aims to pull carbon dioxide (CO2) directly from the atmosphere, a technology proponents claim is essential for combating climate change. But with high costs, modest CO2 removal projections, and questions about economic viability, is this project a groundbreaking step or an expensive experiment driven by carbon tax credits? Could planting trees achieve the same results at a fraction of the cost? And what does this mean for Canadian consumers already grappling with rising energy costs?

The Project: Specs and CO2 Removal Potential

The Deep Sky DAC centre is designed to test multiple carbon capture technologies under Alberta’s harsh climate, with the goal of scaling up to commercial levels. While exact CO2 removal targets for this specific $5 million project aren’t detailed in the source, related DAC projects provide context. For instance, a pioneering DAC plant in Iceland, the Mammoth project, aimed to capture 36,000 tonnes of CO2 annually but only achieved 105 tonnes in its first 12 months. Assuming Deep Sky’s centre achieves a modest 1,000 tonnes of CO2 per year (a conservative estimate for a test facility), we can evaluate its cost-effectiveness.

The project’s $5 million price tag covers initial setup and testing, but DAC is notoriously expensive. Industry estimates suggest DAC costs range from $600 to $1,000 per tonne of CO2 captured, though optimists project costs could drop to $100–$200 per tonne with scale. At $600 per tonne, capturing 1,000 tonnes would cost $600,000 annually in operational expenses alone, excluding the $5 million capital investment. Amortizing the $5 million over 10 years adds $500,000 per year, bringing the total cost to $1,100 per tonne for 1,000 tonnes annually.

Trees vs. DAC: A Cost Comparison

Could trees do the job cheaper? On average, a mature tree absorbs about 22 kilograms (0.022 tonnes) of CO2 per year. To capture 1,000 tonnes of CO2 annually, you’d need:

\frac{1,000 \text{ tonnes}}{0.022 \text{ tonnes per tree}} \approx 45,455 \text{ trees}

Planting costs vary, but in Canada, reforestation programs estimate $2–$5 per tree, including planting and maintenance. Using $3 per tree:

45,455 \text{ trees} \times \$3 \text{ per tree} = \$136,365

This one-time cost establishes a forest that captures 1,000 tonnes of CO2 annually for decades, assuming proper land management. Compare that to DAC’s $1.1 million per year for the same CO2 removal, and trees appear drastically cheaper. However, trees require land (approximately 45–90 hectares for 45,455 trees at 500–1,000 trees per hectare), and Alberta’s available land is already heavily forested, limiting scalability. DAC, while energy-intensive, can be built on smaller industrial sites and paired with geological storage, which trees can’t replicate.

Carbon Taxes and Credits: The Driving Force?

Is the Deep Sky project viable without government subsidies? Canada’s carbon pricing system, which ended for consumers in 2025, previously set a price of $80 per tonne of CO2 in 2024, with plans to reach $170 by 2030. Industrial carbon pricing in Alberta, under the TIER program, incentivizes emissions reductions, and DAC projects can generate carbon credits at $180 per tonne for direct air capture in the U.S. (a comparable benchmark). At $180 per tonne, capturing 1,000 tonnes generates $180,000 in credits annually—far short of the $1.1 million cost. Even at $170 per tonne, the project loses money without significant cost reductions or additional subsidies.

Alberta’s $5 million investment, combined with federal tax credits covering up to 50% of carbon capture costs, suggests heavy reliance on public funds. Critics argue DAC is “a dead technology walking,” with funds better spent on renewables or nature-based solutions like reforestation. The project’s appeal lies in its potential to attract private investment and position Alberta as a clean-tech hub, but without carbon credits or subsidies, it’s unlikely to be economically viable today.

Consumer Costs in Canada

Canada’s carbon tax, which ended in 2025, directly impacted consumers through fuel charges. In 2024, drivers in Alberta paid $0.1431 per litre of gasoline due to the $80 per tonne carbon price. For a household consuming 2,000 litres annually, this added:

2,000 \text{ litres} \times \$0.1431 = \$286.20 \text{ per year}

The Canada Carbon Rebate redistributed these revenues, with Albertans receiving $228 per household in 2025, offsetting most but not all costs. Industrial carbon pricing under TIER, which funds projects like Deep Sky, indirectly raises costs for consumers through higher prices for goods and services, though exact impacts are harder to quantify. The $5 million TIER investment equates to roughly $1.10 per Albertan (population ~4.5 million), a modest direct cost but part of broader spending on emissions reduction that could increase energy and production costs.

Global Costs of Carbon Capture and Tax Programs

Globally, carbon capture and storage (CCS) and DAC are scaling up, driven by tax incentives and climate targets. The U.S. 45Q tax credit offers $85 per tonne for CCS and $180 for DAC, with over 100 officials recently calling for its termination due to high costs and limited impact. In 2023, global CCS capacity was 49 million tonnes per year, with projects costing $50–$100 per tonne for point-source capture and $600–$1,000 for DAC. Assuming 10 million tonnes of DAC globally at $800 per tonne, annual costs reach $8 billion, a fraction of the $4.6 trillion spent on clean energy in 2023 but still significant.

Carbon tax programs vary widely. Canada’s system (before its repeal) collected ~$7 billion annually at $80 per tonne across 85 million tonnes of emissions. The EU’s Emissions Trading System, pricing at ~€70 per tonne, generated €38 billion in 2022. Global carbon pricing revenue is estimated at $100 billion annually, with costs passed to consumers through higher fuel, energy, and goods prices. For DAC to scale to 1 billion tonnes annually (a IPCC target), costs could hit $1 trillion per year at current prices, raising questions about affordability.

Is It Worth It?

The Deep Sky DAC centre is a bold experiment, but its $5 million price tag and high operational costs make it a tough sell compared to planting trees, which could achieve similar CO2 removal for under $150,000. Carbon credits and subsidies are critical to its existence, but even with $180 per tonne, the project isn’t profitable without breakthroughs in cost reduction. For Canadian consumers, the direct cost is small, but industrial carbon pricing and clean-tech investments may indirectly raise living costs. Globally, DAC and carbon taxes are expensive tools in the climate fight, with critics arguing that renewables, electrification, or nature-based solutions offer better value.

Alberta’s investment signals ambition, but the math suggests trees—or other low-cost alternatives—might outshine DAC for now. As one skeptic put it, “You might better spend your time planting trees.” Until DAC costs plummet, projects like Deep Sky risk being more symbolic than transformative.

I would also add the skepticism of carbon taxes and carbon credits, as well as their ability to impact behavior. I think carbon taxes and credits are a system that siphons money out of circulation and directs it to projects that can be used for kickbacks and corruption.

Occidental Petroleum has heavily invested in carbon capture programs, and it may now face a financial challenge, as the United States appears to be diverging from the Canadian, UK, and EU models. Were they wrong to follow that path? No, they were ready to take advantage of the gravy train afforded to people to take advantage of the handouts.

However, the carbon tax and energy policies in Canada, the UK, and the EU soon present some significant stumbling blocks. If the UK, EU, and Canada start forcing the United States to implement Scope 3 controls and pay carbon credits and carbon taxes, you will see a separation from the United States as a trading partner. The United States Congress can stop this, but that would require the assumption that the controlling Republicans can stop being RINOs and enact legislation to protect U.S. energy producers from being negatively impacted by the UK and EU carbon tax and credit programs.

If you have heard me say this before, new trading blocs are forming, and carbon taxes and capture for Net Zero policies are something to watch. Those that have carbon taxes and credits will likely follow the path of deindustrialization and fiscal failure.

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Notes and Assumptions

1. CO2 Removal Estimate: The 1,000-tonne annual estimate is speculative, as the source doesn’t specify Deep Sky’s target. It’s based on scaling down from larger DAC projects like Mammoth.

2. DAC Costs: Operational costs ($600/tonne) and capital amortization ($5M over 10 years) are industry averages and may vary.

3. Tree Planting: Assumes $3 per tree and 0.022 tonnes CO2 per tree annually, with land availability as a constraint.

4. Consumer Costs: Fuel cost calculations assume typical household consumption; industrial cost pass-through is qualitative due to lack of precise data.

5. Global Costs: DAC and carbon pricing estimates are based on available data and scaled projections.

6. Carbon Tax Repeal: Canada’s consumer carbon tax ended in 2025, but industrial pricing (TIER) continues, affecting project funding.

7. Canada should not have to worry about Carbon or Net Zero with the amount of trees and forests.