Canada Growth Fund Invests $200 Million in Entropy, Purchases Carbon Credits

One of Entropy's carbon capture and storage sites

(Credit: Entropy Inc)

by | Dec 22, 2023

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Canada Growth Fund (CGF) and Advantage Energy have made a $200 million investment agreement with Entropy as well as a carbon credit offtake agreement for up to one million tons worth of carbon capture and storage (CCS) per year.

According to CGF, this strategic partnership represents a global first in compliance markets — the structure of the agreement helps de-risk private CCS investment and establishes carbon price certainty for Canadian projects, altogether helping the CCS industry grow within the country.

CGF aims to invest in projects and technologies that may significantly reduce emissions in Canada’s economy, and Entropy reportedly aligns well with this mission. The Canada-based company maintains a CCS solution, called Modular Carbon Capture and Storage, which the company claims is the first of its kind. The technology includes a modular device that may be retrofitted at existing facilities that cause point-source emissions, such as ethanol, methanol, natural gas, and steel production sites.

“Entropy is excited to partner with CGF in re-establishing Canada as a world-leading CCS market,” said Mike Belenkie, president and CEO of Entropy. “By creating a large-scale CCO to guarantee long-term carbon pricing and adding $200 million to our existing Brookfield funding for third-party projects, Entropy has a clear path to accelerating growth and reducing emissions, right here at home. While we will remain a global CCS developer, we believe our projects are likely to advance much more quickly in Canada than any other country in the world.”

Entropy also made a $300 investment agreement with Brookfield in March of 2022 to scale the company’s CCS technology globally.

Funding Supports Next Phase of Entropy’s Glacier CCS Project

Canada Growth Fund’s carbon offtake agreement includes a purchase of up to 9 million tons worth of carbon credits from Entropy projects, and the first project to benefit from the funding is Entropy’s Glacier Phase 2.

The Glacier project is Entropy’s flagship CCS facility, and it has captured nearly 200,000 tons of carbon since it first became operational in 2022. The second phase is expected to draw up to 185,000 tons of carbon per year at the initial price of $86.50 per ton. This is projected to total about 2.8 million tons over a 15-year term. Additional Canada-based CCS projects beyond Glacier will also be supported by the funding.

Entropy’s modular technology presents a solution to a common challenge currently faced by the CCS industry: scalability. While CCS is a needed technology for emissions reductions, especially in hard-to-abate sectors, the International Energy Agency considers the industry to be well off track at present, largely because most projects remain at a small scale.

Development is reportedly picking up, however, as technologies such as Entropys’ receive financial support and technologies are made to be efficiently installed. As the industry works to gain traction, researchers recommend various nature-based carbon storage options, such as forest conservation and agricultural methods, as solutions for the short term.

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