CO2 Solutions Inc., a Quebec company pioneering technology in carbon capture and utilization, is seeking bankruptcy protection less than six months after announcing the commissioning of its first commercial carbon capture unit. Ernst and Young Inc. has been appointed trustee and will assist CO2 Solutions in its restructuring efforts.
CO2 Solutions’ technology involves capturing carbon using a proprietary enzyme and rerouting it to other industrial purposes. In 2016, it entered into an agreement with Fibrek General Partnership, a subsidiary of Resolute Forest Products Inc., to install a 30-tonne per day CO2 capture unit at Resolute’s Saint-Félicien, Quebec pulp mill and reuse of the captured CO2 at the adjacent Serres Toundra greenhouse facility.
On April 29, 2019, the company announced that performance of the Saint-Félicien unit had met or exceeded all initial expectations and that full commercial operation, including revenue generation, would start in the fall of 2019.
However, construction of the Saint-Félicien unit came in $3 million over its budgeted $8-million cost. In an interview with La Presse, company CEO Evan Price said that cost overrun led to the collapse of an expected $8-million cash infusion from an investor and gave rise to the decision to seek protection from creditors.
Global interest in carbon capture, utilization and storage is growing, partly as an acknowledgment that the technology will be necessary if greenhouse gas emission targets set in Paris in 2016 are to be met. However, it remains a costly technology to implement and is difficult to justify in a low carbon price environment.
According to the UK-based Carbon Capture and Storage Association, these projects “cannot be developed based on current carbon prices. [Carbon capture and storage] should be treated similar to other low-carbon technologies; it needs only a long-term support structure equivalent to that which has been given to other low-carbon technologies in recent years.”