Bipartisan Spending Package Funds Foundational Carbon Management Activities, Sets the Stage For Further Progress in Budget Reconciliation Legislation

The following statement may be attributed to Madelyn Morrison, External Affairs Manager of the Carbon Capture Coalition on the final passage of the fiscal year (FY) 2022 omnibus:

“On Thursday evening, the Senate passed a $1.5T FY 2022 funding package by an overwhelmingly bipartisan margin, boosting annual federal funding levels for the first time since December 2020. Final passage of the FY2022 omnibus came a day after members of the House of Representatives cleared the bill through their chamber. The package now heads to President Biden’s desk for his signature.

“Building off the unprecedented investments made in the bipartisan infrastructure law, including fully funding the 2020 Energy Act, the FY2022 omnibus includes modest, yet crucial increases for the core carbon management programs at the Department of Energy, with over $45 million in increased funding for carbon capture, removal, utilization and storage technologies. Additionally, the package includes a $2 million increase over FY2021 to expand capacity for the Class VI program at the Environmental Protection Agency – a critical investment to bolster efforts to permit Class VI geologic storage wells and review state primacy applications in a program which has been historically underfunded.

“These programs, in combination with critical policy mechanisms like the cornerstone federal section 45Q tax credit, are essential pieces of the larger puzzle to scale carbon management technologies at the rate necessary to meet midcentury climate goals, protect and create a high-wage jobs base, and foster domestic energy and industrial production. However, while these incremental gains remain important to realizing economies of scale, Congress now must deliver the broad portfolio of federal policy support for carbon management in pending budget reconciliation legislation, including direct pay and multi-year extension of the 45Q tax credit, increased credit values for industry, power and direct air capture, and dramatically reduced annual capture thresholds. Combined with the commercialization funding contained in the infrastructure law, these enhancements to the 45Q tax credit would result in an estimated 13-fold increase in carbon management capacity and annual CO2 emissions reductions of 210-250 million metric tons by 2035.”

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The Carbon Capture Coalition is a nonpartisan collaboration of nearly 90 businesses and organizations building federal policy support for economywide deployment of carbon capture, removal, transport, utilization, and storage. Our mission is to reduce carbon emissions to meet midcentury climate goals, foster domestic energy and industrial production, and support a high-wage jobs base through the adoption of carbon management technologies. Convened by the Great Plains Institute, Coalition membership includes industry, energy, and technology companies; energy and industrial labor unions; and conservation, environmental, and energy policy organizations.