Canada reverses ban on tax credits for carbon capture used in enhanced oil recovery

Summary

Canada is reversing its ban on tax credits for enhanced oil recovery (EOR), a technique that uses captured carbon dioxide to extract more oil. The government's carbon capture tax credit program, initially designed to exclude EOR, will now allow companies to claim credits for capturing CO2 and using it to boost oil production. Critics argue this undermines climate goals by subsidizing fossil fuel extraction under the guise of emissions reduction, and that the practice may actually increase overall emissions when accounting for the additional oil produced and burned.