Carbon capture projects cost a lot to build. The federal government created the Carbon Capture, Utilization and Storage (CCUS) Investment Tax Credit (ITC) to help with these costs. This credit supports industrial decarbonization. If your business plans to capture, transport, use, or store CO₂ in Canada, this refundable tax credit can return a large share of your capital costs.
The Carbon Capture, Utilization and Storage (CCUS) Investment Tax Credit (ITC) is a federal refundable tax credit for eligible capital spending on qualified CCUS projects in Canada. It covers equipment and infrastructure used to capture CO₂, move it, and permanently store it or use it in approved ways.
Because the credit is refundable, you can get cash back even if your corporation does not owe any corporate income tax that year.
To qualify for the CCUS Investment Tax Credit, all of the following must be true:
Only capital expenditures qualify. Operating costs do not count.
Eligible expenses generally fall into four categories:
Land costs and equipment used mainly for enhanced oil recovery (EOR) are not eligible.
The credit rate depends on the type of activity and the year the expense is incurred:
There is no published maximum dollar cap per project, but claims must be reasonable and supported by documentation.
Before claiming the CCUS ITC, you must complete several steps with NRCan:
These steps confirm that your project meets federal climate and technical standards.
You claim the CCUS ITC through your corporate income tax return:
Most large projects work with tax advisors because claims can be complex.
GrantHub’s eligibility matcher helps you find federal and provincial clean technology programs by industry and location in seconds.
Skipping the FEED study
If you do not complete a FEED study, your project will not be eligible for the credit.
Including operating expenses
Only capital costs qualify. Labour, maintenance, and energy costs do not count.
Assuming EOR equipment qualifies
Equipment used mainly for enhanced oil recovery is generally not eligible.
Claiming before NRCan review
CRA can deny claims if NRCan project evaluation steps are incomplete.
Q: Is the CCUS Investment Tax Credit refundable?
Yes. If the credit is more than your corporate tax payable, CRA will issue a refund.
Q: Can partnerships claim the CCUS ITC?
Yes, but only the taxable Canadian corporation partners can benefit from the credit.
Q: Can the CCUS ITC be combined with other clean economy tax credits?
Stacking is restricted. You generally cannot claim multiple federal clean economy ITCs on the same expenditure.
Q: What is a FEED study?
A Front-End Engineering Design study confirms technical feasibility, costs, and emissions outcomes. It is mandatory for CCUS ITC eligibility.
Q: Does the CCUS ITC apply to projects outside Canada?
No. All eligible equipment must be used in Canada.
GrantHub tracks hundreds of active grant and tax credit programs across Canada, including federal clean economy incentives. This makes it easier to see what fits your business profile.
The Carbon Capture, Utilization and Storage Investment Tax Credit can cover a large share of CCUS capital costs, but only if your project meets strict technical and tax rules. Before you start spending, confirm your eligibility, timing, and stacking limits. GrantHub helps Canadian businesses track clean economy incentives and see which programs match their project plans—before applications and tax filings begin.
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