Everyone chuckled after Deep Sky’s Phil De Luna told the Global Direct Air Capture Conference audience to “come to Canada!” The quip came amid a highly technical conversation about the challenge of finding financing for the nascent technology, but captured a sentiment that cropped up throughout the two-day event — that the uncertainty of the United States market in 2025 is prompting CDR companies to look elsewhere.
“Lots of people in the Canadian government recognize that there’s an opportunity here, especially in this very unique and intense geopolitical moment,” De Luna, Deep Sky’s chief science and commercial officer, told Latitude Media after his panel. “The temperature in Canada is elevated, and it’s unified. People want to build large nation-building projects, and I think direct air capture is an example of that.”
Deep Sky is a technology-agnostic CDR project developer based in Canada — and the company is loud about that fact, devoting a part of its homepage to describing “why Canada is the best place for carbon removal.” The company launched in 2022 with a unique model: acting as an owner-operator and partnering with technology companies from the Swiss Climeworks to the Irish NEG8. Deep Sky secures everything from the right site to electricity access, specializing in the aspects of project development that many CDR companies find to be their biggest hurdles.
While many of Deep Sky’s partners are DAC companies — Mission Zero Technologies, Airhive, Skytree and Skyrenu, to name a few — it also partners with ocean CDR companies like Captura, CarbonBlue, and Equatic; the company is tracking roughly 140 technologies and has signed NDAs with 60, De Luna said.
But Deep Sky also works with buyers. In mid-November, the company signed a first-of-a-kind deal with Microsoft, where the tech giant commits to purchase anywhere from 10,000 to 1 million tons of CDR; Deep Sky will start delivering tons this year.
Asked if Deep Sky has seen increased interest since President Donald Trump won the U.S. election and took office, De Luna said “absolutely.”
Even two or three years ago, when Deep Sky was brand new and no one in the industry yet understood the novel business model, technology developers were confused, skeptical, and protective of their intellectual property. (“We don’t take any IP,” De Luna clarified. “We don’t ask for any exclusivity. We really just want to build stuff.”).
But since Trump took office, he said, “many of those companies that were not interested or didn’t think the business model fit…have come back.” While De Luna wasn’t willing to name specific companies, he characterized some of these as large companies that have already deployed at scales larger than Deep Sky’s Alpha pilot project. Those developers, much to Deep Sky’s surprise and delight, given the company’s comparably small size, are now looking for their help to build a commercial project in Canada.
This echoes the experience of Na’im Merchant, executive director of the policy group Carbon Removal Canada. “We absolutely are seeing a lot more interest in Canada from [both] American companies and companies that were thinking about setting up shop in America,” he told Latitude. “The biggest thing we hear is they want policy certainty, and they don’t feel like they’re getting that in the United States.”
Both De Luna and Merchant, who was also at the Global DAC Conference, had people come up to them after their respective panels to talk about their interest in setting up in Canada. And Carbon Removal Canada’s annual Carbon Removal Day in February had an unprecedented level of interest this year: roughly 200 attendees versus the 100 that came in 2024. Merchant said his group was surprised by the enthusiasm, and had to scramble at the last second to change venues. Many of those additional attendees traveled internationally to get to Ottawa for the event.
Canada’s appeal
This wave of interest is in part because the Canadian government is leaning in. Canada has a carbon capture, utilization, and storage investment tax credit that covers 60% of capital expenditures for new DAC facilities, and provinces like Alberta have additional incentives of their own. The country also has a true carbon removal procurement program (versus the U.S. program, which was structured as a prize), and earlier this year was the first in the world to publish a federal DAC protocol.
Of course, Canada is going through some political upheaval of its own — after Prime Minister Justin Trudeau stepped down, a federal election for his replacement will be held later this month. But Merchant, who is Canadian but previously worked for years in U.S. CDR policy, said he is “shocked by the level of pragmatism” from both the Liberal and Conservative parties; while the messaging differs slightly, there is broad agreement on the need for carbon removal.
This embrace is made easier by the geography of Canada. Over 80% of the country’s electricity comes from clean sources, and it is the third-largest producer of hydroelectric power in the world. The country has no shortage of space, and according to a 2023 Carbon Removal Canada study, the country has enormous potential for carbon storage, at up to 678 gigatons of carbon dioxide. De Luna also pointed out that, unlike in the U.S., Canada’s subsurface geological data is both public and well-organized, which makes it easier for a company like Deep Sky to identify sites, and generally helps accelerate CDR development and investment. And while the country is cold, which can complicate the building process, these benefits for many companies outweigh the downsides.
That same Carbon Removal Canada analysis found that scaling the country’s CDR industry to meet the need for 312 megatons of removal by 2050 could create more than 300,000 jobs and generate $143 billion in GDP.
Meanwhile, south of the border, the Trump administration has set a goal of reviving American manufacturing. Just yesterday, the president declared a national emergency “to increase our competitive edge, protect our sovereignty, and strengthen our national and economic security” that involved at least 10% tariffs on all countries, set to take effect on Saturday. And in the day since, trade partners from China to the European Union announced plans to retaliate.
Opinions differ on whether this protectionism will prompt the industrial renaissance Trump hopes for — but the lack of policy certainty, especially for industries like clean energy and climate tech that are so dependent on international trade, is already causing stock markets to tank all over the world. That said, not only for Canada but also for all of the trading partners that the Trump administration’s aggressive policies are targeting, the U.S. provocation is also an opportunity.
“There’s this recognition that our largest trading partner, our largest ally, doesn’t look so reliable anymore,” Merchant said. “And one way that we can address that is by creating stronger trade partnerships for existing industries in Europe and Asia.”
