- The Oil Sands Alliance expects a Pathways final investment decision in late 2027 or early 2028.
- The first stage would capture and store 6Mt of CO₂ annually by the mid-2030s.
- The original proposal envisaged 22Mt of reductions by 2030, underlining how far the timetable and ambition have slipped.
Canada’s largest oil sands producers are targeting late 2027 or early 2028 for an investment decision on the Pathways carbon capture and storage (CCS) network, provided governments and industry can agree its fiscal terms.
The multibillion-dollar project would connect oil sands facilities to a shared CO₂ pipeline and storage hub in Alberta’s Cold Lake region. Its backers include Canadian Natural Resources, Imperial Oil, Suncor Energy, Cenovus Energy and ConocoPhillips Canada, which collectively account for around 95% of Canadian oil sands production.
Oil Sands Alliance president Kendall Dilling told reporters that definitive agreements with the federal and Alberta governments were expected by mid-November.
“It depends, obviously, on regulatory approvals and a few things, but I think late 2027 into early 2028 is kind of that window,” he said.
A non-binding agreement signed in July sets out several of the measures needed to advance the development, including carbon-pricing arrangements, financial support, permitting and a carbon sequestration agreement. Alberta has agreed to extend its Carbon Capture Incentive Program to 2035.
Canadian Prime Minister Mark Carney has linked progress on Pathways to support for a proposed 1m barrel-a-day oil pipeline to the Pacific coast. The wider strategy seeks to expand Canada’s access to Asian markets and reduce its dependence on the US while presenting lower-emissions oil as internationally competitive.
Smaller project requires substantial public support
The current pathway is considerably less ambitious than the version unveiled in 2021.
The original proposal targeted 22Mt of annual emissions reductions by 2030. The first stage now aims for 6Mt by the mid-2030s, followed by another 10Mt by 2045.
Dilling described the earlier timetable as “incredibly aggressive”, arguing that its scale would have been difficult to manage without losing control of costs.
Those costs remain the central obstacle. Cenovus chief executive Jon McKenzie has estimated that the development could require as much as C$30bn, warning that the combination of CCS expenditure and carbon pricing could leave Canadian producers at a disadvantage to US competitors.
The government-industry negotiations must decide how much of that risk sits with taxpayers, emitters and carbon-market participants. Producers require confidence in long-term carbon values because the infrastructure itself does not generate a conventional commodity revenue stream.
Pathways is also designed to facilitate oil production growth, reducing operational emissions per barrel but not capturing the much larger emissions released when the resulting fuels are consumed. That distinction explains why supporters describe CCS as essential industrial infrastructure, while environmental groups regard the project as public support for hydrocarbon expansion.
The global relevance lies in the commercial structure rather than the oil sands context. UK CCS clusters also depend on shared pipelines, storage sites, anchor customers and long-term government-backed revenue arrangements.
Pathways demonstrates that announcing a large network is easier than allocating its liabilities. Projects can remain technically mature but commercially stalled if governments and emitters cannot agree construction support, carbon price protection and responsibility for underused infrastructure.
The scale-down does not prove that CCS cannot work. It does show that governments should distinguish between projects needed for genuinely hard-to-abate industrial processes and schemes whose principal purpose is extending production growth. That distinction will become more important as limited public funds are allocated across competing UK clusters.
