The company planning to power a proposed data centre in the Saint John community of Lorneville pressured the New Brunswick government to fix its industrial carbon tax rate for 15 years.

VoltaGrid, a company based in Texas, sought a predictable price on its emissions weeks before the province adopted a weaker federal carbon pricing standard. According to a report by CBC News based on documents obtained through a right to information request, VoltaGrid CEO Nathan Ough demanded exact figures from provincial officials.

“No guessing,” Ough insisted in an email to Opportunities New Brunswick.

The Spruce Lake AI Data Centre Project

BeaconAI, a company based in Alberta, plans to build the Spruce Lake AI data centre. The facility requires massive amounts of electricity. It will draw 200 megawatts from the NB Power grid and 190 megawatts from an onsite natural gas plant built by VoltaGrid.

This natural gas plant will emit more than 750,000 tonnes of greenhouse gases annually. This volume makes it the third largest emitter in New Brunswick. The facility falls under the provincial pricing system for industrial emissions. This system charges companies when they exceed specific emission intensity targets.

Carbon Tax Negotiations

VoltaGrid executives expressed frustration over the unpredictable nature of the federally imposed pricing system. Company vice president Krasen Chervenkov told Opportunities New Brunswick that the company needed a solid view of costs because international competitors do not pay carbon taxes.

Provincial officials provided sample calculations but refused to guarantee the rate for 15 years. Jill Pelkey, director of strategic climate initiatives in the Environment Department, explained that the province cannot predict federal benchmark changes.

Pelkey also warned about the environmental cost of the project. In a May briefing note, she wrote that the estimated emissions from the Spruce Lake Data Centre mean New Brunswick will likely not achieve its 2030 greenhouse gas emissions target.

A Weaker Pricing Standard

The federal government recently announced a weaker carbon pricing standard. The new rules lower the required carbon price and retroactively reduce this year’s per tonne price from $110 to $95.

Premier Susan Holt adopted this weaker standard for New Brunswick. She stated the move gives the province a competitive playing field. This decision breaks her 2024 election promise to implement a robust pricing system for large industrial emitters.

Following the adoption of the weaker standard, VoltaGrid agreed to comply with the system. The company told a provincial technical review committee it will report emissions and pay the required carbon price.

The provincial environmental impact assessment review for the project remains ongoing.

Frequently Asked Questions

What is the proposed Lorneville data centre?

The Spruce Lake AI data centre is a proposed facility in the Saint John community of Lorneville. BeaconAI is building the project, and VoltaGrid is constructing an onsite natural gas plant to help power it.

Why did VoltaGrid demand a fixed carbon tax rate?

VoltaGrid wanted predictable operating costs for the next 15 years. Company executives argued they needed exact carbon tax figures to remain competitive with international companies that do not face similar environmental taxes.

How will the natural gas plant impact the environment?

The VoltaGrid gas plant will emit over 750,000 tonnes of greenhouse gases every year. Provincial environment officials warn this massive output will prevent New Brunswick from reaching its 2030 emission reduction targets.