CRA indicates that "actual eligible use percentage" of a carbon capture project should be based on the end “use” (i.e., capture) of the carbon

Aco owned and operated a facility to capture carbon dioxide emissions from its industrial facilities. The captured carbon was then transported through the pipeline of Bco, for delivery to the carbon sequestration hub of Cco. However, significant unanticipated fugitive emissions of the captured carbon occurred on the pipeline, which constituted an “ineligible use” of the captured carbon as defined in s. 127.44(1).

In this context, how was the "actual eligible use percentage" computed under s. 211.92(1) in respect of Aco’s CCUS project? CRA indicated that in its view it was “the end use of captured carbon that should be used in quantifying the amount of captured carbon in both eligible and ineligible use” for purposes of such definition.

As a result, “Aco would be required to use measurements of the end use of its captured carbon” (presumably in the hands of Cco). However, as the unanticipated fugitive emissions occurred within Bco’s pipeline transportation network, “Aco may be able to avail itself of the relief provided in subsections 211.92(6) and (7) … because such emissions would likely be due to extraordinary circumstances outside of the control of Aco.”

Neal Armstrong. Summary of 25 March 2025 External T.I. 2024-1039131E5 under s. 211.92(1) - "actual eligible use percentage".