Exclusive-White House, top Democrats agree to boost carbon capture
credit in budget bill -sources
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[October 02, 2021]
By Jarrett Renshaw and Timothy Gardner
WASHINGTON (Reuters) -The White House and
top Democratic lawmakers have agreed to boost a tax credit for
industrial carbon capture projects in a deal that could help solidify
support for the budget reconciliation bill at the heart of President Joe
Biden's economic agenda, two sources with knowledge of the matter said.
The agreement worked out by White House officials and lawmakers,
including Senators Ron Wyden and Sheldon Whitehouse and some of their
counterparts in the House, would raise the so-called 45-Q tax credit for
carbon capture projects in heavy industry, such as cement and steel
plants, to $85 per metric ton, up from $50.
The White House and Senator Whitehouse did not immediately respond to
requests for comment. A spokesperson for Wyden said conversations are
ongoing.
The incentives, if passed, could help Biden with his climate goals by
getting more industrial plants to invest in heavy equipment that siphons
off carbon dioxide (CO2) emissions for permanent storage underground,
preventing the gas from reaching the atmosphere.
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The deal would also waive "capture rate" requirements that say that
plants must sock away a high percentage of carbon to be eligible. That
could allow more plants to begin to get some credit for investing in
initial carbon credit units.
Still, some environmentalists say the technique may never enter wide
commercial use as it is expensive to build, certify, and operate. Many
projects, such as Petra Nova in Texas, have stopped operations in recent
years.
U.S. Representative Cheri Bustos, a Democrat who has sponsored carbon
capture legislation, said the deal was welcome news. Raising the credit
"would drastically increase our carbon capture capacity by 2035 and
create tens of thousands of new jobs," including at ethanol and
manufacturing plants in rural states, Bustos said in a statement.
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![](../images/100221pics/news_k53.jpg)
U.S. Senator Ron Wyden (D-OR) speaks to reporters at the U.S.
Capitol in Washington, U.S., September 28, 2021. REUTERS/Elizabeth
Frantz
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Current 45-Q tax credits allow polluting plants to
claim $50 per ton of carbon dioxide they sequester and $35 a ton for
projects where carbon is captured and then used to push more crude
oil from aging oilfields.
The agreement does not yet cover the power sector, which includes
coal and natural gas plants, the source of about one-third of U.S.
CO2 emissions.
Senator Joe Manchin, a Democrat from large coal-producing state West
Virginia, has pushed Senate Majority Leader Chuck Schumer to allow
coal and natural gas burning power plants to get incentives for
carbon capture in the reconciliation bill.
Discussions are progressing on boosting the carbon capture credit
for power plants that could get Manchin on board, the sources said.
Manchin's vote is key for passage of the reconciliation bill in the
Senate which is divided 50-50. He has said that the original $3.5
trillion bill is far too costly.
Manchin's office did not immediately respond to a request for
comment.
Biden and his fellow Democrats are hoping to pass the reconciliation
bill on a party line vote in both legislative chambers along with a
smaller bipartisan infrastructure bill.
(Reporting by Jarrett Renshaw and Timothy Gardner; Editing by Chizu
Nomiyama, Mark Porter and Marguerita Choy)
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