Carbon Capture Coalition Endorses the Bipartisan Captured Carbon Utilization Parity Act
February 28, 2023 | News
New Bipartisan, Bicameral Legislation Addresses Key Gap in Tax-based Carbon Management Policy
February 28, 2023, WASHINGTON, DC – The Carbon Capture Coalition today announced its endorsement of the bipartisan Captured Carbon Utilization Parity Act, which addresses a key gap in tax-based carbon management policy for carbon reuse projects. The bill was introduced today in the U.S. Senate and House of Representatives by a diverse group of bipartisan members committed to bolstering carbon management policy — led by Senators Sheldon Whitehouse (D-RI) and Bill Cassidy (R-LA) and Representatives David Schweikert (R-AZ) and Terri Sewell (D-AL).
“The introduction of the CCU Parity Act further strengthens the 45Q tax credit by closing the cost gap for projects recycling captured carbon into low- and zero-carbon products, making them more economically viable to produce,” said Coalition Executive Director Jessie Stolark. “This legislation marks a pivotal next step in the continued deployment of carbon management technologies focused on the beneficial reuse of captured carbon and we look forward to working with the bill sponsors to ensure its swift passage.”
Carbon captured from both point-source industrial and power facilities and direct air capture technologies has a critical role to play in reducing greenhouse gas emissions, decarbonizing the American economy, and creating low- and zero-carbon products. According to the Global CO2 Initiative Roadmap, carbon reuse has the potential to reduce current annual global CO2 emissions by up to 10 percent, including among the largest sources of industrial carbon emissions, such as steel, cement, chemicals and refining, as well as power generation, all which feature lower concentrations of CO2 relative to other industrial sources of CO2, thus increasing the per-ton costs of capture.
This new legislation fills a key remaining gap in the federal policy framework dedicated to the scale-up of the full value chain of carbon management technologies by establishing parity for the reuse of CO2 or its precursor CO to produce valuable products with those projects seeking to safely and permanently store captured CO2 in geologic formations. The CCU Parity Act would support carbon reuse technologies and products that are not yet cost competitive with other incumbent, well-established products and processes, or face other barriers to market entry by providing the following credit levels under the 45Q tax credit:
- $85 per metric ton for industrial and power generation facilities seeking to reuse captured carbon in the manufacturing of low- and zero-carbon products including fuels, chemicals, building products, advanced materials and other products of economic value; and
- $180 per metric ton for direct air capture projects beneficially reusing captured carbon to manufacture low and zero-carbon fuels, chemicals, building products, advanced materials and other products of economic value.
While still nascent relative to the other technologies in the carbon management value chain, carbon reuse can provide an important and valuable component to building the carbon management marketplace. Increasingly, carbon reuse is seen as an important complement to large-scale carbon storage, as it provides value-added markets and carbon reuse opportunities for carbon capture operations. The National Academies of Science has estimated that globally, reuse pathways could use up to 1 gigaton (or one billion tons) of captured CO2 per year. This growing carbon-to-value market could be worth an estimated $800 billion annually by 2030.
While legislative action by the 117th Congress increased 45Q credit values across the board, the credit is bifurcated between permanent storage of captured CO2 and the utilization of CO2 for the reuse for commercially valuable products, or to produce additional oil in depleted oil and gas wells. Increasing the CO2 reuse pathway to $180 per ton for products sourced from direct air capture and $85 to those products sourced from industry and power will further incentivize the deployment and innovation of the recycling of captured carbon for low and zero-carbon products, including fuels, chemicals, and building materials.
“The introduction of the CCU Parity Act builds upon the unprecedented bipartisan efforts to bolster federal incentives and funding for carbon capture, removal, reuse, transport and storage in the 117th Congress. It further solidifies the role the full value chain of carbon management technologies must play in reducing greenhouse gas emissions and decarbonizing the American economy, while retaining and providing good-paying jobs that families and communities depend upon,” said Stolark. “As we look to fill remaining federal policy gaps needed to realize the economywide deployment of these technologies, the CCU Parity Act will lead the way in demonstrating this Congress’s commitment to carbon management as a climate mitigation tool and supporting the development of a circular economy.”
Read the bill summary here.
Convened by the Great Plains Institute, the Carbon Capture Coalition is a nonpartisan collaboration of more than 100 companies, unions, conservation and environmental policy organizations, building federal policy support to enable economywide, commercial scale deployment of carbon management technologies. This includes carbon capture, removal, transport, utilization, and storage from industrial facilities, power plants, and ambient air.
Statements on the Bill from Supportive Organizations
Michele Stockwell, Executive Director, BPC Action
“We commend Sens. Whitehouse and Cassidy and Reps. Schweikert and Sewell for their leadership on the CCU Parity Act. This commonsense bill simply gives equal credit for equal climate benefit for the beneficial reuse of captured carbon dioxide compared to permanent sequestration underground. Creating incentives for deploying direct air capture and carbon capture technologies is crucial to meeting climate goals while continuing to ensure energy affordability and reliability.”
Allyson Anderson Book, Chief Sustainability Office, Baker Hughes
“Captured carbon can provide valuable feedstock for a wide variety of industrial materials. Targeted policy support will help carbon utilization reach its full potential, and the Captured Carbon Utilization Parity Act sends a powerful market signal to bolster investment in this technology. As a leading energy technology company actively involved in the US clean energy economy, Baker Hughes strongly supports this bipartisan legislation. We commend Senators Whitehouse and Cassidy, Congressman Schweikert, and Congresswoman Sewell for their leadership on carbon utilization.”
Brent Constantz, CEO & Founder, Blue Planet Systems
“Blue Planet Systems fully supports the Captured Carbon Utilization Parity Act and urges all members of Congress to support this important legislation. We believe that this bill will play a crucial role in accelerating the development and deployment of carbon utilization technologies and help to mitigate the harmful effects of carbon emissions on our planet.
We are thrilled to see this legislation being introduced, as it will provide much-needed support to nascent companies that are working to develop and deploy carbon utilization technologies. By creating parity between the credit value for carbon utilized for commercial products and secure saline storage, this bill will incentivize the development of innovative carbon management projects that can turn carbon emissions into valuable products. By ensuring that carbon utilization projects receive the same level of support as secure saline storage, this legislation will help to level the playing field for these technologies and encourage more companies to invest in carbon capture.
Finally, time to implementation is critical and we believe that utilization technologies can provide a pathway toward rapid decarbonization.”
Dr. Jennifer Holmgren, CEO, LanzaTech
“As a US-based company, LanzaTech is grateful for the leadership of Senators Whitehouse and Cassidy, and Representatives Schweikert and Sewell. Their bipartisan Captured Carbon Utilization Parity Act would drive innovation, create new manufacturing jobs, expand US-based supply chains and promote domestic energy security. This legislation is critical to unlocking our nation’s potential to lead in creating the technologies of the future.”
Richard Jackson, President Operations, U.S. Onshore Resources and Carbon Management, Occidental
“Carbon utilization technologies are an exciting opportunity to turn captured carbon into useful products, and an important part of Occidental’s carbon management strategy to reach net-zero emissions before 2050. We are pleased to support this legislation which would further enhance investment and deployment opportunities for carbon utilization technologies.”
Shannon Heyck-Williams, Associate Vice President of Climate and Energy, National Wildlife Federation
“The National Wildlife Federation appreciates the leadership of Senators Whitehouse and Cassidy in introducing the CCU Parity Act. Imagine a world where unavoidable carbon emissions can be captured and converted into building materials, fuels, and other useful products. We’re starting to see these technologies today, but federal support is needed to kick innovation into high gear. This bill will help create a circular economy and provide more alternatives to fossil fuel-based goods.”
Emily Skor, CEO, Growth Energy
“This legislation would further encourage investment in the utilization of carbon for everything from creating fabrics and bioplastics to carbonating beverages; taking advantage of the 99.9% pure carbon created during the ethanol fermentation process to do so,” said Growth Energy CEO Emily Skor. “We applaud this bipartisan effort and urge Congress to act quickly to unlock the potential benefits—both economic and environmental—of carbon utilization.”
Rich Powell, CEO, ClearPath Action
“In the past few Congresses, we have seen incredible bipartisan efforts to advance policies that capture and sequester carbon dioxide, which are critical to reducing global emissions,” said Rich Powell, ClearPath Action CEO. “The CCU Parity Act will build off of these successes, demonstrating America’s commitment to carbon innovation.”
Adrian Corless, CEO, CarbonCapture Inc.
“CarbonCapture Inc. thanks Senators Whitehouse and Cassidy and Congressmen Schweikert and Sewell for the bipartisan, bicameral introduction of the CCU Parity Act. This common sense legislation is a win win for the United States: it will lower carbon dioxide levels and galvanize the growth of direct air capture (DAC) and partner utilization businesses. The availability of secure geologic storage remains a constraint on the geographic footprint of the DAC industry, and the CCU Parity Act will lower that barrier and allow for a more even distribution of CCU partnerships around the country. We hope Congress will speedily pass this bill and further empower American companies to do the work of solving climate change.”
Martin Keighley, CEO, CarbonFree
“Within the next five years, almost every company that emits carbon will need to rely on carbon capture to meet federal goals and ultimately continue to operate for decades to come. The Captured Carbon Utilization Parity Act is a critical opportunity for carbon capture technologies to scale, and ultimately provide support for emitters that remain essential to the global supply chain.”