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Carbon capture sequestration (CCS) is a technology that siphons
planet-warming carbon dioxide from industrial facilities and
stores it underground to keep it out of the atmosphere. The
administration of President Joe Biden considers it an important
part of its plan to decarbonize the U.S. economy by 2050.
Under the proposal, embedded in the Biden administration’s $1.75
trillion spending package, CCS projects would become eligible
for an $85 credit for each metric ton of carbon dioxide captured
and stored, up from the current $50-per-ton credit that the
industry says is too low.
In the current tax credit regime, known as 45Q, CCS has
languished. The United States currently has just a dozen
operational commercial CCS facilities, along with a handful that
have been suspended due to technological or economic problems,
according to the Global CCS Institute.
The Clean Air Task Force, which advocates for carbon capture,
cheered the proposal to boost the credit, saying it expects the
change to lead to a spike in overall carbon capture capacity in
the United States of 13-fold by the mid 2030s.
It said the subsidy would also help the CCS industry lower costs
and speed up deployment time, paving the way for growth in other
countries keen to reduce emissions.
“These provisions will not only enable decarbonization of
domestic industries, but can also multiply emissions reductions
abroad,” CATF spokeswoman Lee Beck told Reuters.
The currently existing facilities sequestered just 6.8 million
tons of industrial carbon dioxide underground in 2020, enough to
offset the emissions from 1.5 million passenger cars, according
to the Environmental Protection Agency. Additional CO2 was
injected underground for so-called enhanced oil recovery, a
controversial process that uses the gas to increase oil field
pressure to push more oil out of the ground.
Some environmental groups expect the credit will have the
unintended consequence of extending the lives of big polluters
like coal-fired power plants, among the world’s biggest
greenhouse gas emitters, by giving them a new revenue stream.
Under the credit proposal, industrial facilities would be
required to capture at least 50% of their carbon emissions to be
eligible for the credit, with that threshold rising to 75% for
power plants - thresholds green groups say are too low.
“Such a handout to the fossil industry risks putting a sharp
stop to the transition plans of coal-fired utilities, causing
them to pursue speculative and expensive carbon capture dreams
that are likely never to be realized, to the detriment of the
climate and taxpayers,” said the Sierra Club, an environmental
group focused on speeding the retirement of coal plants.
Big U.S. utilities Duke Energy and AEP, which run sizeable
coal-fired power plant fleets, told Reuters they were monitoring
developments with the credit, but did not say if the proposed
increase would lead them to consider CCS projects for their
plants.
(Reporting by Richard Valdmanis in Boston; Editing by Matthew
Lewis)
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