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Canada partners with Germany's Heidelberg to support net-zero cement plant

FILE PHOTO: Question Period in the House of Commons on Parliament Hill in Ottawa

By Nia Williams

(Reuters) - The Canadian government on Wednesday signed a partnership with Germany's Heidelberg Materials to support a proposed C$1.4 billion ($1.04 billion) carbon capture utilization and storage (CCUS) unit at the company's Edmonton cement plant.

If the project goes ahead it will create North America's first carbon-neutral cement plant and is expected to capture over 1 million tonnes of carbon dioxide annually. Canadian energy infrastructure firm Enbridge is developing the carbon sequestration hub where emissions will be stored.

The two parties signed a memorandum of understanding to start negotiations, Canada's Ministry of Innovation, Science and Industry said in a statement.

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Support would come from Canada's Strategic Innovation Fund, which invests in major projects, but the ministry did not say how much it could contribute.

"This milestone is fundamental to achieving a viable business case that will allow this groundbreaking, first mover project to be realized," Heidelberg said in a statement.

Last week Canada expanded eligibility for CCUS investment tax credits to include cement and concrete plants.

Prime Minister Justin Trudeau's Liberal government is relying heavily on planned Alberta facilities to capture and store underground the carbon produced by heavy industry, including oil and gas, fertilizer and cement.

"There is a growing urgency for rapid decarbonization in high-emitting sectors, including the cement and concrete industry, and by working hand in hand with the industry, we can support the adoption of innovative technologies that will contribute to lower emissions and increased competitiveness," Canadian Industry Minister Francois-Philippe Champagne said in a statement.

($1 = 1.3456 Canadian dollars)

(Reporting by Nia Williams; Editing by Josie Kao)