Quebec introduces Bill 17 to establish a legal framework for underground carbon storage, unlocking investment and enabling voluntary carbon credit markets
Deep Sky plans large scale direct air capture and storage facilities, including a more than $2 billion project targeting 500,000 tonnes of annual CO2 removal
Policy clarity aligns with federal tax incentives and positions Quebec to meet projected need for 13 million tonnes per year of permanent carbon removal by mid century
Quebec’s government has introduced new legislation aimed at building a regulatory backbone for permanent carbon removal, a move that industry leaders say could accelerate billions of dollars in climate infrastructure investment and reshape the province’s role in global carbon markets.
Bill 17, which amends existing energy storage and pipeline laws, creates a dedicated framework for underground carbon reservoirs. For developers like Deep Sky, a Montreal based carbon removal company, the proposal addresses a regulatory gap that had slowed the deployment of geological storage projects despite growing climate policy pressure.
Policy Framework Targets Net Zero Delivery
Quebec faces a difficult challenge: eliminating emissions that cannot be reduced through electrification or efficiency alone. According to the province’s Advisory Committee on Climate Change, achieving carbon neutrality will require permanent carbon removal infrastructure capable of handling roughly 13 million tonnes annually by 2045 to 2050.
The new legislative framework seeks to reconcile environmental oversight, community concerns, and industrial development. By establishing clear rules around geological storage and pipeline infrastructure, the government aims to create the legal certainty needed for large scale direct air capture and storage projects.
Deep Sky CEO Alex Petre said the regulatory clarity could shift the pace of deployment. “This legislation gives Quebec the regulatory predictability required to scale from pilot projects to large-scale carbon removal infrastructure,” he said. “It creates the conditions for significant regional investment while supporting Quebec’s climate objectives. Timely adoption of this bill will allow Quebec to act now and strengthen its leadership in carbon removal. Further, timely adoption will also allow Deep Sky to begin construction on our large scale commercial facilities in Quebec by 2027.”
Finance, Incentives, And Market Access
The policy framework aligns with Canada’s broader climate finance architecture. Developers will be able to generate carbon credits tied to permanent storage for both domestic and international voluntary markets, while also qualifying for federal carbon capture investment tax credits. These incentives cover up to 60 percent of direct air capture spending and 37.5 percent of storage investments, improving project economics in a sector still facing high capital costs.
For institutional investors and corporate buyers seeking durable removals, the legislation could expand supply in a market increasingly scrutinized for integrity and permanence. Governance clarity is emerging as a decisive factor in financing decisions, particularly as carbon removal moves from demonstration projects to infrastructure scale.
RELATED ARTICLE: Deep Sky Secures First DAC Offtake Deal with Rubicon Carbon
Economic Stakes And Regional Development
Deep Sky is advancing projects in Thetford Mines and Bécancour, with the Thetford Mines facility alone expected to exceed $2 billion in investment. The company estimates construction activity could generate between 7,000 and 12,000 jobs while contributing between $1 billion and $1.7 billion in economic benefits.
When operational, the site is designed to remove more than 500,000 tonnes of CO2 annually. The company completed Quebec’s first geological injection of captured carbon in December 2025, providing early proof of concept for long term storage under local conditions.
Quebec’s geological profile strengthens its competitive position. Estimates suggest roughly 8 gigatonnes of storage capacity in saline aquifers across the St. Lawrence Lowlands and up to 800 gigatonnes in mafic and ultramafic rock formations throughout the Appalachians and Canadian Shield. Access to low carbon electricity further enhances the region’s attractiveness for energy intensive direct air capture technologies.
What Executives And Investors Should Watch
For corporate climate strategies, Quebec’s legislative approach reflects a broader trend toward government led frameworks designed to de risk emerging carbon removal markets. Policy alignment between provincial regulation and federal tax credits provides a model for jurisdictions attempting to move beyond pilot projects toward commercial deployment.
The introduction of Bill 17 also highlights growing competition among regions seeking to host carbon management infrastructure. As carbon pricing systems mature and voluntary markets evolve, access to legally recognized storage capacity may become a strategic asset for industries facing residual emissions.
If adopted, the framework could position Quebec as a North American hub for engineered carbon removal, linking public policy, private investment, and geological resources into a cohesive climate strategy. For global investors tracking scalable negative emissions solutions, the province’s next steps will serve as an early test of how regulatory design translates into real world deployment.
Follow ESG News on LinkedIn
