More than a pipeline?

Will a grand bargain on climate unlock investment or just more pipelines?

Author

Justin Reist
December 02, 2025

Hey there - today we’re unpacking Canada and Alberta’s “grand bargain” on pipelines and carbon capture projects, and what it means for climate tech. Our take: it’s a lot more than just a pipeline, and there’s some real potential for the deal to break through issues like carbon pricing and inter-provincial grids that have been slowing progress.

Want to go deeper on Canada’s climate economy? Check out these episodes from The Climate Cycle podcast:

Elsewhere in climate tech:

  • Farm Credit Canada backs UNDO’s on-farm carbon removal

  • EverWind gets the green light for its wind-to-hydrogen project

  • A new fusion energy R&D hub in Ontario

TECH

Will Carney’s “grand bargain” on climate pay off?

Credit: TransMountain

What happened: PM Carney and Alberta Premier Danielle Smith signed a deal to advance a new pipeline to BC’s coast as a project of national interest - but only if Alberta fixes its carbon market and the Pathways CCUS megaproject goes ahead.

The details: Under the MOU, the feds will support a West Coast pipeline, grant Alberta a carve-out from Clean Electricity Regulations, and remove parts of federal greenwashing rules and the oil and gas emissions cap (both already previewed in the budget).

In return, Alberta will commit to long-term industrial carbon pricing of $130/tonne (with timelines and ramp up tbd), collaboration on a nuclear generation strategy, expanded cross-province grids, and a plan to cut methane emissions 75% by 2035. The pipeline project is also explicitly contingent on the Pathways CCUS project moving forward.

Many hurdles remain: BC’s tanker ban, consultation with First Nations, and actually finding a private sector proponent for the pipeline.

Why it matters: Pipelines makes headlines, but the full deal shows that the Carney government is betting heavily on a stronger carbon market and electrification.

  • A higher, credible carbon price could unlock new investments in low-carbon technology and large-scale CCUS projects like Pathways. An oversupply of credits in Alberta’s market has pushed the effective price to just ~$30/tonne, well below the $95 benchmark.

  • Nuclear generation and expanded grid interties would also expand the market for clean electricity in western Canada and support industrial electrification.

If successful, the deal will strengthen the economics of carbon removal, methane abatement, and other climate solutions, while also creating a more stable policy environment with the feds and provinces rowing in the same direction.

And with so many conditions to be met, including a July deadline for a pipeline proposal, Carney may be betting that a pipeline never materializes while carbon market reforms move ahead.

Yes, but: The deal carries real climate and economic risks.

  • A new pipeline will likely increase emissions (both production and end use)

  • Climate wins can backslide - Alberta agreed to up its industrial carbon price in the past to secure the TMX pipeline

  • Billions spent on pipelines will lock up capital in potentially stranded or underused assets as oil demand peaks by the end of the decade

What’s next: Terms need to be nailed down by April, including agreements on carbon pricing, methane, and a binding agreement with Pathways. It’s a pivotal window as key details get negotiated.

It’s also an important opening for climate tech builders. Policymakers need to hear directly from companies working on carbon management, electrification and other climate solutions about the climate and economic potential that’s on the table with a stronger carbon market - or the final package will tilt toward legacy interests.

CLIMATE CAPITAL

🪨 UNDO (London, UK) secured a strategic investment from Farm Credit Canada’s VC arm to deploy its enhanced rock weather carbon removal with Canadian farmers.

🏦 Deetken Impact closed a $106 million commitment from the Canadian government for its new Inclusive Climate Action Fund to mobilize climate finance work across Latin America and the Caribbean.

IN THE FIELD

⛽️ EverWind received provincial approval for its 432MW wind project in Nova Scotia to power its green hydrogen and ammonia export projects.

💨 Deep Sky will deploy direct air capture technology from Airbus at its Deep Sky Alpha facility in Alberta, removing 250 tonnes of CO2 annually.

⛏️ Canada Fluorspar is now North America’s only producer of the critical mineral fluorspar after restarting operations at its Newfoundland mine. 80% of the material comes from China.

🔋 Electra Battery Materials and Positive Materials signed a supply partnership for battery-grade cobalt for cathode precursor.

☀️ Canadian Solar announced plans take back direct oversight of its US operations and re-shore manufacturing from China to North America.

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NEWS

📡 Signals & Currents

A review of BC’s CleanBC program found it made some progress on climate, but needs a refresh for full impact. Changes include doubling down on electrification, climate tech, and industrial emissions reductions. The report also found LNG expansion is offsetting much of BC’s progress.

💬 Why it matters: The report highlighted climate tech as an emerging strength, with tens of thousands of jobs and opportunities to double-down on its climate tech strategy. Renewing the program gives the province an opportunity to learn and adjust, rather than throwing out hard-won progress.

A new Centre for Fusion Energy will be built in Ontario to develop advanced domestic fusion energy capabilities.

Quebec is also reviewing its emissions targets. It’s about halfway to its target of 37.5% below 1990 levels, but concerned that the other half will be much harder to hit.

Manitoba joined an Ontario-led proposal to expand interprovincial transmission lines and create a national energy grid.

Wind power is set to drive Canada’s renewable energy growth and makes up 70% of planned additions, while energy storage capacity could 10x.

Projected BESS growth - CER

Build Canada Homes’ new investment framework will prioritize projects that are low-carbon, climate-resilient and use innovative building materials, offering an incentive for builders to adopt new tech.

Canada’s securities commissions aren’t ready to restart work on mandatory climate-related disclosures due to US policy shifts and market risks.

Newfoundland and Labrador are the latest provinces to limit power access for energy-hungry cryptocurrency miners.

New Canadian tariffs on steel imports, designed to protect domestic producers, will make wind energy projects more expensive.

Quick Hits

COMMUNITY

🚀 Artificial Intelligence for Canadian Energy Innovation: Hosted by NRCan, this program funds applied research, development and demonstration (RD&D) of AI solutions that accelerate the pace of, and lower the costs associated with, energy technology innovation. Apply by December 11th.

🗓️ Canada’s Grid in the Age of AI: Join me in Ottawa for this discussion on how the rapid growth of data centres will transform Canada’s grid. Dec 18th, Ottawa.

➡️ Discover more climate events.

🧑🏻‍💻 dcbel is hiring a Product Manager OS Platform to define the on-device experience of its Ara home energy platform.

➡️ Find more open roles.

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