The Globe and Mail reports that Canada is proposing to support the carbon-capture projects of oil-sands companies.

The Globe and Mail reported that Canada Growth Fund, the federal funding agency of Canada, has proposed to fund a multi-billion dollar carbon-capture project by Pathways Alliance. The Alliance represents Canada's largest oil sands producers.

According to a report published on Sunday, which cited sources familiar with this matter, the CGF's offer is likely to start further negotiations. However, the final agreement is still months away as the two sides are at odds on certain key terms.

Carbon capture is the process by which the carbon dioxide produced from industrial activity can be stored underground. The report did not mention any financial details regarding the investment.

Pathways Alliance and Canada Growth Fund did not immediately respond to requests for comments.

Pathways Alliance proposes a C$16.51 billion investment to reduce carbon emissions from oil sands. Environmentalists have criticized the plan for its slow progress and request for more government funding.

According to its website, the Pathways Alliance is comprised of Canadian Natural Resources (CNR), Cenovus (ConocoPhillips Canada), Imperial, MEG Energy, and Suncor Energy, which together represent 95% of Canada’s oil sands output.

CGF is a $15-billion public investment vehicle, which, according to the website, helps to attract private capital for building Canada's clean economic system by using instruments that absorb certain risk, to encourage private investments in low carbon projects, technologies and businesses.

In Saskatchewan and Alberta, Canadian oil company Strathcona Resources and CGF partnered earlier this year to build carbon sequestration and capture infrastructure. (1 Canadian dollar = 1.3895 dollars) (Reporting and editing by Rashmi aich in Bengaluru)

(source: Reuters)