Carbon Capture Coalition Statement on the December 2021 GAO Report on Carbon Capture Project Management

The following statement may be attributed to Jessie Stolark, Public Policy and Member Relations Manager:

“The Carbon Capture Coalition welcomes the GAO report released last month that evaluates U.S. Department of Energy (DOE) management and oversight of industrial and power plant carbon capture and storage demonstration projects funded through the American Recovery and Reinvestment Act (ARRA) of 2009 in response to the 2008 financial crisis.

“While opponents of carbon capture have seized on the report as evidence that Congress should not provide additional federal policy support for deployment of carbon management technologies, the GAO’s actual analysis leads to different conclusions.

“First, the report concludes that DOE investments in commercial demonstration of carbon capture and storage at industrial facilities were highly successful, and Air Products and ADM’s world class hydrogen and ethanol carbon capture projects, respectively, continue to operate effectively today.

“Second, in the case of coal-based power generation projects, where all but one failed to proceed to construction and commercial operation, it is important to understand that capturing CO2 from power plant flue gas costs significantly more than from hydrogen production and ethanol fermentation. For these power sector projects, the GAO report highlights the lack of additional federal policy support beyond DOE cost-share funding as a major barrier to their success.  As a result, these projects were unable to secure necessary private financing at a time when natural gas prices were falling and anticipated federal climate policy never materialized.

“Additionally, it is important to realize that the DOE-supported projects reviewed by GAO were under development long before Congress reformed and expanded the federal Section 45Q tax credit in 2018. These carbon capture projects were left without the kind of robust, financially certain federal tax credits available to other low and zero-carbon technologies at the time. By contrast, in the same 2009 ARRA legislation, Congress provided early commercial utility-scale solar demonstration projects access to federal DOE demonstration dollars and an investment tax credit. With this assistance, project developers and their investors had the capacity to finance this first generation of projects and successfully launch commercial utility scale solar generation in the U.S.

“Fortunately, Congress is poised to finally deliver the broad portfolio of federal policy support for carbon management that has long been available to other key clean energy and industrial technologies that are essential to meeting our climate goals. The bipartisan infrastructure package enacted by Congress at the end of last year includes increased federal funding for commercial-scale demonstration and builds upon the 2018 legislation revamping the 45Q tax credit.  Additional provisions in pending budget reconciliation legislation to extend and increase the value of the 45Q tax credit and provide a direct pay option to project developers will, if enacted, go a long way toward providing federal policy parity for carbon management demonstration projects and addressing a major shortcoming identified in the GAO report.

“Finally, the GAO helpfully identifies important differences in DOE management and oversight of coal power plant carbon capture projects, as compared to industrial sector demonstration projects, that led to significantly increased expenditure of taxpayer dollars than would have otherwise occurred on projects that failed to advance to construction. It is critical that the right lessons are learned from the management of technology demonstration funding that flowed from the 2009 federal stimulus bill. Toward that end, the industry, labor and NGO members of the Carbon Capture Coalition will review the GAO recommendations and consider their own recommendations to the Administration and Congress. These considerations will be important as DOE stands up a new Office of Clean Energy Demonstrations and begins to implement the stepped-up federal funding in the bipartisan infrastructure bill for commercial-scale demonstration of industrial and power plant carbon capture, direct air capture and carbon utilization technologies.

”To be clear, the GAO report should not be misconstrued as justification for scaling back further investment in climate-essential carbon management technologies. To the contrary, it validates important successes to date and highlights opportunities to augment federal policy and improve management and oversight to ensure that we develop and deploy the carbon capture projects necessary to meet midcentury climate goals.”

###

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.