Canada Opens Carbon Removal Credits to International Buyers

Canada holds a planned pipeline of 11.7 million tonnes of carbon removal projects, yet most of it sits unbuilt while developers wait for buyers with deep enough pockets to fund construction.

Yesterday, Ottawa signalled exactly how it plans to open the gates to foreign capital.

On 24 September 2026, Environment and Climate Change Canada (ECCC) launched a policy framework to trade internationally transferred mitigation outcomes (ITMOs) under Article 6 of the Paris Agreement. The mechanism, announced under Minister of the Environment Julie Dabrusin, would eventually let Canadian companies sell verified carbon removal credits to foreign governments and international corporations.

Article 6 is the section of the Paris Agreement that lets countries cooperate on their climate targets, including by trading credits across borders.

What follows in this piece is not the whole story, so here is the part that matters most: the design of the framework changes how carbon removal projects get financed right now, and it positions Canada carbon removal credits as a strategic hedge for the country’s energy and mining sectors against a volatile trade relationship with the United States. Here is how both pieces fit together.

The retrospective accounting bridge for project finance

The headline is a consultation. The commercial reality is more immediate than that sounds.

ECCC’s proposed framework aims to catalyse investment in mitigation, including nature-based and engineered carbon removals, by turning Canadian credits into internationally tradable assets. The detail that matters for financing is buried in the sequencing: credits can be classified retroactively once the finalised rules are in place.

That means developers do not have to wait for the final rulebook to move.

Deep Sky CEO Damien Bouchard told iPolitics he does not expect the framework to be finalised by January, but noted credits can be accounted for retroactively once the rules exist. For a project financier, that flips the risk calculation. You can sign an offtake deal today with the expectation that formal Article 6 status attaches to those credits later.

Deep Sky is the proof of concept. In May 2026, its Deep Sky Alpha facility in Alberta injected 14 tonnes of CO2 underground, and by 29 June 2026 those removals had been independently reviewed and registered by certification firm Isometric as the first certified direct air capture (DAC) carbon removal credits in North America. Direct air capture pulls CO2 straight from the atmosphere and stores it permanently underground.

The company has not waited for policy to build a buyer book. Its multi-year offtake agreements already include:

• Microsoft and Royal Bank of Canada (RBC): a multi-year removal agreement running through 2034, with quarterly credit delivery
• TD Bank Group: a 10-year deal announced 4 June 2026 to purchase over 18,000 verified DAC removal credits from Deep Sky’s Canadian facilities
• Lufthansa (Germany) and Engie (France): EU-based corporate buyers with voluntary removal purchases reported in mid-2026

Every one of those contracts predates the Article 6 framework. What the framework adds is recognition: once credits count toward a buyer’s national climate target, foreign governments and corporates have reason to sign larger and longer deals. For you as an investor, the read is that early capital is already moving on the promise of retrospective classification, not waiting on the finished rules.

Solving the domestic demand bottleneck

Now look at why Ottawa needs foreign buyers at all. The numbers make the case on their own.

Canada currently operates roughly 98,000 tonnes of carbon removal capacity. Its planned pipeline sits at 11.7 million tonnes across 38 tracked projects, according to Carbon Removal Canada’s Carbon Console database, last updated on 24 September 2026. The national target for 2035 is 35 million tonnes.

The gap between what is running and what is planned is roughly 120-fold. That is the structural problem the framework is built to solve.

According to Carbon Removal Canada, the domestic pool of buyers is simply too small to absorb the capital these mega-projects require. Multiple projects with confirmed capacity are stalled, waiting for the long-term offtake contracts that de-risk construction. A single country’s corporate purchasers cannot underwrite an eleven-million-tonne build-out.

That is where the deeper liquidity of European and Asian markets comes in. ECCC’s own materials argue that aligning ITMO trading with Article 6 rules will give investors the certainty needed to move projects from planning into construction.

For project developers, the interpretation is direct. Securing a European or Asian offtake agreement is now the most viable route to funding a Canadian build, because the domestic cheque book cannot cover the bill. The policy is not chasing a theoretical opportunity; it is responding to a demand shortfall that has already frozen capital in place.

Trade diversification and the geopolitical pivot

Zoom out, and the climate policy starts to look like a trade instrument.

Prime Minister Mark Carney’s push to link Canada’s carbon removal sector with EU and Asian markets sits inside a broader effort to strengthen trade ties outside the United States, according to Reuters. Amid ongoing trade frictions with Washington, Ottawa is pursuing closer economic integration with Europe and Asia, and carbon credit exports align neatly with that diversification agenda.

The existing demand signals are already European. Deep Sky’s deals with Lufthansa and Engie show EU corporate appetite for Canadian removals, even though those are voluntary purchases rather than formal Article 6 transactions.

The catch is that reaching those markets demands strict integrity standards. ECCC has been explicit that any traded credit must meet a high bar.

The government standard Every internationally transferred credit must be real, additional, verified, and permanent, with robust systems to prevent the same tonne of CO2 being counted twice across national inventories.

That requirement is not decoration. Double counting, where both the exporting and importing country claim the same reduction, is the fastest way to destroy market trust and trigger a diplomatic dispute.

For institutional investors, the takeaway is that Canadian carbon credits are shaping up as strategic geopolitical exports, not just environmental assets. That reframes the risk. You are no longer weighing project risk alone; you are weighing it against a sovereign trade strategy designed to hedge exposure to US market volatility.

Timelines and integrity risks for early movers

The door is opening, but it is not open yet. ECCC’s framework remains a consultation, and its own CEO reference point, Damien Bouchard of Deep Sky, does not expect finalised rules before January.

Several hurdles remain before credits can trade internationally. Host-country authorisation procedures still need to be defined, and the accounting mechanisms that prevent double counting between national inventories are not yet operational. International precedents such as Switzerland’s bilateral deals with Peru and Ghana show how politically sensitive these authorisation and baseline questions become in practice.

The next signals to watch are the provincial and Indigenous consultation phases ECCC has flagged, which will shape how additionality tests and registry governance actually work.

The framework opens international trade, but the burden of proving absolute credit integrity falls squarely on developers. For early movers, that is both the opportunity and the exposure.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. These statements are speculative and subject to change based on market developments and policy outcomes.