The Canada Growth Fund (CGF) has announced this week a $200 million investment in Entropy, a Calgary-based startup offering “technologically advanced” carbon capture and sequestration (CCS) solutions.
The $200 million investment comes with a fixed-price carbon credit purchase agreement, known as the Carbon Credit Offtake Commitment (CCO), which can cover up to one million tonnes annually.
Startup Entropy, CGF writes in the press release announcing the investment, has the “potential to significantly reduce emissions in Canada and worldwide,” with the partnership highlighting Canada’s commitment to reducing emissions and representing an “important new investment in Canadian carbon markets.”
In fact, CGF says that the partnership’s large scale and fixed price in the long-term represent a “global first in compliance markets.” By establishing carbon price certainty, this structure helps to de-risk and accelerate private CCS investment.
Patrick Charbonneau, President and CEO of CGF Investment Management, expressed confidence in Canada’s potential:
“With its wealth of natural resources and advanced engineering capabilities, Canada stands as the ideal ground for establishing a thriving CCS industry. The CGF Investment Management team is pleased to deliver this inaugural transaction in Alberta’s carbon market, and we look forward to putting additional capital to work across Canada in the months ahead.”
For CGF, this investment aligns perfectly with its twin mandates: investing in transformative projects and technologies that promise substantial emission reductions in the Canadian economy, like CSS, and supporting Canadian cleantech innovators.
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Deborah K. Orida, CEO of the Public Sector Pension Investment Board, lauded the expertise and diligence of CGF’s team:
“I am very proud of the investment, technical, and execution expertise that the Canada Growth Fund Investment Management team is bringing to the CGF mandate. CGF is able to deliver complex transactions such as this thanks to PSP Investments’ rigorous and established processes and arm’s length governance model.”
Entropy, with its innovative CCS technology that can help Canada meet its emissions reduction goals and a team of Canadian specialists, emerges as a strategic fit for CGF.
“Entropy is excited to partner with CGF in re-establishing Canada as a world-leading CCS market. “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,” Entropy’s President and CEO Mike Belenkie said.
“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,” Belenkie added.
This recent infusion of capital into Entropy isn’t its first. Earlier in 2022, the company secured a $300 million investment from Brookfield through the Brookfield Global Transition Fund.
“Today’s announcement builds on this strong foundation and provides greater revenue certainty to accelerate Entropy’s major investments in Canada,” CGF writes.
Canada’s renewed focus on CCS technology, backed by substantial investments from entities like CGF and Brookfield, underscores the nation’s commitment to combating climate change. As Entropy’s projects gain momentum and scale, the ripple effect is expected to benefit not just Canada but the global community at large, offering a beacon of hope in the fight against climate change.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — Featured Photo Credit: Wirestock.
