Thank you.
Before I begin my remarks, I'd like to acknowledge that we're gathered on the traditional unceded territory of the Algonquin Anishinabe people. I'd like to take a moment to thank the Anishinabe people and pay respect to their elders.
I'd really like to thank the members of the committee for giving us the opportunity to present the strategic innovation fund's net zero accelerator in more detail, and to answer your questions about the accelerator and its objectives.
I'd like to note that my colleagues and I at Innovation, Science and Economic Development are thankful that the audit conducted by the commissioner of the environment has led to such interest in the program. It is my hope that by answering your questions today, I can provide more clarity about the NZA's mandate and operations.
To aid in this—further to your committee's request of June 4—ISED has provided copies of all term sheets and contribution agreements signed through the NZA and a copy of the NZA tracker tool. Due to the sensitive nature of some of the information that has been shared with you, I'll be happy to discuss these documents in more detail during the in camera portion of the meeting.
Climate change is a complex challenge, and the NZA addresses it with a multi-faceted solution across three pillars.
The first is decarbonizing large-emitting sectors. The second is accelerating industrial transformation. The third is advancing clean technology development and Canada's battery ecosystem. The NZA tracker tool provides a detailed snapshot of progress towards these investment pillars. Projects signed to date, across all pillars, are expected to generate emissions reductions of roughly 11.2 megatonnes.
Through the first pillar, the NZA is encouraging significant investments by large emitters to reduce their near-term greenhouse gas emissions. These efforts towards GHG reductions from this sector also enhance our competitive edge in a globally decarbonizing economy. To date, three agreements, including with Algoma and ArcelorMittal Dofasco, have been signed to decarbonize the steel-making industry and are expected to generate reductions of about 7.2 megatonnes.
Beyond these signed projects, other large-emitter projects are in our pipeline and continue to advance through due diligence. We expect these projects could add up to 10 megatonnes in additional reductions.
These major transformation projects require government support. This support helps companies lower their investment risk and significantly reduce their greenhouse gas emissions in the short term, while remaining financially viable in a competitive market.
However, a company's decision-making rests on a number of factors. Barriers to a final investment decision include high initial costs, low project maturity, risks associated with the adoption of new technologies, and changing material and labour costs.
Pillar 1 projects are the main target of the commissioner's audit. However, the accelerator also supports projects that promote the development of clean technologies, as well as the transformation of businesses and industrial sectors to achieve carbon neutrality by 2050. Pillar 2 and 3 projects present an estimated reduction of four megatonnes, resulting from both on‑site reductions and the deployment of clean technologies.
Projects funded under NZA pillar 2 and pillar 3 include Svante, a company building equipment needed for carbon capture and storage. With a manufacturing facility in Burnaby, British Columbia, Svante will support the carbon capture and storage needs of hard-to-abate sectors, including cement, steel, and oil and gas in Canada and around the world. The deployments of Svante's innovative technology are expected to contribute to significant GHG reductions in Canada and globally. The market for carbon capture is growing, with regulations in place in Canada, the U.S.A. and Europe, highlighting the growing demand for these technologies.
In terms of advancing clean technology development and Canada's battery ecosystem, the NZA has invested in projects such as Volkswagen's PowerCo battery cell manufacturing project and GM's electric vehicle manufacturing efforts. These projects are pivotal in developing a robust Canadian EV ecosystem.
Just as electric vehicle projects are helping to build the supply chain and secure the future of Canada's automotive sector, the net zero accelerator is helping to transform Canada's economy by advancing emerging clean technologies such as small modular reactors, nuclear fusion, carbon capture and sequestration, next-generation aircraft and many more, across Canada.
For all accelerator-funded projects, Innovation, Science and Economic Development Canada ensures that the contractual obligations and performance requirements defined in the initiative are met. Where the accelerator is able to assess significant greenhouse gas reductions as a result of a project, contribution agreements include obligations to reduce or meet emissions intensity standards. These agreements also include provisions that impose consequences if minimum thresholds are not met. Greenhouse gas reductions are monitored and tracked through progress reports.
Beyond the environmental benefits, NZA investments set commitments to foster substantial economic activities. Since the launch of the NZA, companies have committed to creating and maintaining over 36,000 jobs and to create over 14,000 co-op positions.
They've also made research and development commitments totalling $4.5 billion. Those are not insignificant numbers. Indeed, they highlight the critical impact that projects funded through the NZA can have on Canada's economy in addition to supporting global climate goals.
I hope that the documents that have been submitted to the committee will provide a clearer picture of the broader investment principle that underpins the NZA.
Thank you for giving me the floor.
