Canada’s major oil-sands producers are targeting late 2027 or early 2028 for a final investment decision on the multibillion-dollar Pathways carbon capture and storage (CCS) project. The initiative is backed by five major producers—Canadian Natural Resources, Suncor Energy, Cenovus Energy, Imperial Oil and ConocoPhillips Canada—and would involve capturing carbon dioxide from oil-sands facilities, transporting it through a regional pipeline network and storing it underground. The project is designed to capture about 6 million tonnes of CO₂ emissions per year, with the full reduction targeted by January 1, 2035.
The decision depends on agreements between the companies and the Canadian and Alberta governments, including fiscal incentives, carbon-pricing rules and regulatory approvals. The parties expect to finalize key fiscal and policy arrangements by mid-November 2026, which could allow the companies to proceed toward regulatory filings. Under a July 2026 agreement, the Pathways project forms part of a broader goal to cut oil-sands emissions by 16 million tonnes annually: 6 million tonnes through Pathways by 2035, followed by an additional 5 million tonnes by 2040 and another 5 million tonnes by 2045. The project is also linked to plans for expanded Canadian oil exports, including a proposed West Coast pipeline, making the CCS investment an important part of the government’s strategy to combine increased oil production with lower emissions intensity.
The Pathways plan has been under development since 2021, but its high cost and uncertainty over government policy have delayed a final investment decision. The latest agreement provides additional support, including an extension of Canada’s carbon-capture investment tax credits to 2035 and Alberta’s commitment to extend its Carbon Capture Incentive Program. The project’s infrastructure is expected to be in service by 2032, with the full Pathways system completed by 2035. Industry leaders argue that CCS is necessary to maintain the competitiveness of Canadian oil in markets increasingly concerned about emissions, while critics continue to question whether the large public and private investment required will deliver sufficient climate benefits. More