Taxonomy Foundations
Please feel free to answer only the questions that are of the most interest and relevance to you.
It is proposed that the design and implementation of the Canadian taxonomy be informed by the following six principles: Credible; usable; interoperable; dynamic; regionally specific; and prioritized.
2a. Do you agree or disagree with these proposed principles as the foundation for the taxonomy?
Agree
3. Please rate each of the principles below on a scale from “very important” to “not at all important.”
- Dynamic
- Important
Do No Significant Harm and Minimum Social Safeguards
Please feel free to answer only the questions that are of the most interest and relevance to you.
The proposed taxonomy framework for Canada includes a set of Do No Significant Harm (DNSH) criteria and Minimum Social Safeguards (MSS), which will be designed to ensure that climate mitigation objectives do not adversely impact other environmental and social values, or legal rights. It is proposed that issuers must disclose the extent to which they meet specific criteria for both DNSH and MSS in order to claim taxonomy alignment.
4a. Do you agree or disagree with the proposed partial alignment approach, which would require entities to disclose the extent to which DNSH/MSS criteria are or are not met rather than requiring full alignment with all DNSH/MSS criteria?
Select
5a. Do you agree or disagree with the proposed scope of objectives to be covered under the DNSH and MSS frameworks?
Select
6a. Do you agree or disagree with the proposed approach to grounding the DNSH/MSS frameworks in Canadian legislation and going beyond existing laws and standards where necessary?
Select
8a. Do you agree or disagree that different DNSH/MSS standards should apply to projects or entities of different sizes? E.g. more comprehensive disclosures required for larger projects and/or entities, with more streamlined disclosures for smaller projects and/or entities?
Select
Section 3: Activity Classification Framework
Please feel free to answer only the questions that are of the most interest and relevance to you.
The activity classification framework proposes that the green category should be limited to activities with zero or near-zero emissions that make a substantial contribution to climate change mitigation or to activities that directly enable zero to near-zero emissions climate solutions (e.g., electric vehicle manufacturing facilities)
12a. Do you agree or disagree with this approach?
Disagree
12b. Please explain your answer in the space below
The Carbon Business Council supports limiting the green category to zero-to-near-zero emissions activities. We recommend, however, that the definition in Section 3.2 be extended to explicitly capture negative emissions — for example, by amending the language to read “a zero to near-zero, or net-negative, emissions climate solution.” This reflects a broad consensus across climate science and economic modelling that carbon dioxide removal is a required element across possible net-zero pathways.
The framework proposes that the transition category should include activities that have materially high emissions today but have the potential to decarbonize sufficiently to align with the green definition (i.e., zero to near-zero emissions) by 2050. These activities are likely to experience stable or growing demand in Paris-aligned representative pathways due to a lack of technically feasible low-carbon substitutes (e.g., major decarbonization investments in steel, cement, and chemicals manufacturing).
13a. Do you agree or disagree with this approach?
Neutral
14a. Do you agree or disagree that the proposed guardrails for the transition category (both for the whole-of-activity and measures pathways) are sufficient to protect the science-based credibility of the category and reduce the risk of carbon lock-in, while supporting usability?
Neutral
14b. Please explain your answer in the space below
The taxonomy should also draw a clear line between point-source carbon capture and carbon dioxide removal. Point-source capture reduces emissions from an existing emitting process and is appropriately treated as a transition measure. Scaled up carbon dioxide removal will be required on an ongoing basis to manage both hard-to-abate emissions and the legacy stock of CO₂ already in the atmosphere. The taxonomy’s methodology should clarify that carbon dioxide removal is classified in the green category.
The report proposes that initial research on the abatement measures category should be conducted in 2027 and include select emissions-reduction measures for activities that have high Scope 1 emissions today and are unable to achieve the life cycle emissions reductions necessary to align with Paris-aligned pathways (e.g. major decarbonization investments in the upstream production, refining, and distribution of oil and gas). These are activities that are highly likely to experience declining demand as the world transitions to clean energy and alternative technologies.
The report proposes an illustrative list of guardrails for the abatement measures category that, if formally developed and finalized, would be designed to prevent carbon lock-in and ensure the abatement measures category remains credible within a Paris-aligned framework. When thinking about the taxonomy’s credibility and usability, please provide feedback on this illustrative list of guardrails.
Section 4: Technical Screening Criteria
Please feel free to answer only the questions that are of the most interest and relevance to you.
18a. Do you agree or disagree with the proposed approach for developing technical screening criteria?
Neutral
18b. Please explain your answer in the space below
CDR is a cross-cutting activity that can be integrated across the six sectors that have been prioritized for technical guidance on taxonomy alignment. Consideration of carbon dioxide removal opportunities should be part of the core methodology used to develop sector-specific guidance. There are many emerging opportunities to physically integrate carbon removal processes within existing industrial activities. It will be important for sector-specific guidance to look beyond historical precedents and scan for emerging technologies and techniques that will enable priority sectors to align with net-zero pathways. CDR will be a key element of this approach across many sectors.
19. Please rate each of the proposed elements for the screening criteria on a scale from “very important” to “not at all important.”
- Forward-looking wherever possible
- Very important
- Revise as necessary during regular review periods
- Very important
20. When thinking about the taxonomy’s credibility and usability, how technologically specific or prescriptive should the technical screening criteria be?
On the question of how prescriptive technical screening criteria should be, we would caution against over-specification. CDR is a fast-moving, innovative industry, and criteria built around today's dominant technologies risk excluding credible new approaches before they have the chance to scale. We recommend that forward work on criteria be built around outcomes over specific processes and take a technology-inclusive approach.
21. Do you agree or disagree with the proposed approach of focusing primarily on Scope 1 emissions, and addressing Scope 2 and 3 emissions where feasible and/or material?
We support the proposed focus on Scope 1 emissions, with Scope 2 and 3 addressed where feasible and material. CDR projects require investment in capital and operating costs, while generating revenue largely through the sale of removal credits. The taxonomy should treat these as distinct, with alignment attaching to investment in the activity rather than to the credit itself.
It is critical that the taxonomy not create a disincentive for CDR capital and operating investment. Such investment should be clearly taxonomy-aligned under the green category, regardless of how the resulting credits are later transacted. We recommend the Council draw on the CapEx/OpEx-based approach used in comparable taxonomies (e.g., Australia), which recognizes project financing as taxonomy-aligned while keeping credit-sale revenue outside the scope of that claim. This approach preserves both investment incentives and environmental integrity.
Final questions
22. Overall, how satisfied are you with the proposed sustainable finance taxonomy framework?
Neutral
23. Is there any other feedback you would like to provide on the methodology report as a whole that has not already been covered?
While incorporating CDR across all priority sectors should be a near-term focus, there is a remaining risk that the sustainable finance taxonomy will not adequately capture all CDR activities. Some CDR technologies – for instance, direct air capture or river alkalinity enhancement – do not map cleanly onto economic or industrial sectors as traditionally defined.
The structure of a sustainable finance taxonomy can be flexible to where capital flows are most desirable. Given the strong potential of carbon dioxide removal as an area of strategic economic and environmental interest for Canada, adding CDR as a sector in the taxonomy could merit future consideration. There is precedent across internationally-developed taxonomies in defining sectors based on key areas of national interest (for example, the Singapore-Asia Taxonomy includes a carbon capture and sequestration sector). The specific need and prioritization of this work could be assessed in the context of progress in developing sector-specific guidance and its integration of CDR , by mid-2027.
An early signal that Canada’s sustainable finance taxonomy will demonstrate leadership by ensuring carbon dioxide removal is reflected within sector-based guidance and potentially as a distinct sector would helpfully reinforce the need for scaled up investment flows to a portfolio of negative emissions, net-zero enabling projects.