Chief among those milestones was congressional passage of the FUTURE Act to reform the federal Section 45Q tax credit for the beneficial use and geologic storage of CO2 captured from industrial facilities and power plants.
The FUTURE Act was introduced in the U.S. Senate by Senators Heidi Heitkamp (D-ND), Shelley Moore Capito (R-WV), Sheldon Whitehouse (D-RI) and John Barrasso (R-WY). It was cosponsored by a quarter of the U.S. Senate, including 19 Democrats, six Republicans and one Independent. Companion legislation introduced in the U.S. House by Representative Mike Conaway (R-TX) garnered 50 cosponsors, including 35 Republicans and 15 Democrats.
On the heels of enactment of the FUTURE Act in February, the National Enhanced Oil Recovery Initiative, which had led efforts to promote 45Q reform, rebranded as the Carbon Capture Coalition.
The Coalition hosted a launch event at the AFL-CIO headquarters in Washington, D.C attended by national media outlets which featured the debut of a dozen new Coalition participants, bringing Coalition membership to over 50 companies, unions and NGOs.
At the launch, the Coalition announced a new website (www.carboncapturecoalition.org) and broader mandate going forward, including:
enacting complementary federal and state incentives to the revamped 45Q tax credit to attract greater private investment in carbon capture projects;
engaging in federal infrastructure policy to ensure that carbon capture and CO2 pipeline infrastructure are part of a future comprehensive legislative package;
maintaining robust federal support for carbon capture research, development, and demonstration to help bring the next generation of carbon capture technologies into the marketplace; and,
working with governors, state policymakers and local stakeholders to support deployment of carbon capture, pipeline infrastructure and CO2 utilization and storage projects in states and regions around the country.
In June, the Coalition launched The National Carbon Capture Leadership Council, a new group to harness leadership support for carbon capture policy and deployment with the participation of private sector CEOs and labor, NGO and philanthropic leaders.
Reforming Section 45Q marks an essential first step, but a broader framework of federal and state incentives are required to put carbon capture on an equal policy footing with other low and zero-carbon technologies and to achieve economy-wide deployment of carbon capture and storage in the United States. Fortunately, leaders in Congress stepped up this year, introducing several other bipartisan bills designed to provide additional policy support for carbon capture.
The Coalition also hosted invitation-only breakfast briefings for Washington reporters with Senators John Barrasso (R-WY) and Sheldon Whitehouse (D-RI).
Provides for a credit of up to $35 per ton (ramping up over ten years) for captured CO2 that is geologically stored in oil and gas fields through enhanced oil recovery, $50 per ton for storage in other geologic formations, and $35 per ton of CO2 emissions reduced through the beneficial conversion of captured carbon emissions into low carbon fuels, chemicals or useful products.
Removes the previous cap on credits and allows eligible projects that begin construction before January 1, 2024 to claim the credit for up to 12 years after the carbon capture equipment is placed in service.
Lowers the capture threshold for industrial facilities from 500,000 to 100,000 metric tons of annual carbon emissions to ensure that a broader range of industries can participate in the 45Q program.
Expands eligibility to new capture technologies and uses of carbon and provides greater flexibility so that more companies can take advantage of the tax credit in financing carbon capture projects.
Important carbon capture legislation introduced in the U.S. Senate and House this year included:
The USE IT Act, introduced in the Senate by Senators John Barrasso (R-WY), Sheldon Whitehouse (D-RI), Shelley Moore Capito (R-WV) and Heidi Heitkamp (D-ND), would provide federal funding for the demonstration of direct air capture technology (capturing CO2 from ambient air), establish a federal research and development program for carbon utilization, and support collaboration between federal, state, and non-governmental interests to facilitate the planning and construction of pipeline infrastructure to transport CO2 for ultimate storage or use. The bill was passed unanimously by the Senate Environment and Public Works Committee in May.
The Fossil Energy Research and Development Act, bipartisan legislation introduced in the U.S. House by Representatives Marc Veasey (D-TX) and David McKinley (R-WV), would bolster funding for carbon capture research and development and provide new research directives aimed at improving carbon dioxide (CO2) storage and use and developing new CO2 utilization technologies.
Support for carbon capture technology is exceptionally broad and bipartisan. Legislation promoting the further development and deployment of carbon capture technology is one of the only energy and environmental policies that has engendered significant bipartisan support and action in Congress for many years.
Widespread, economy-wide deployment of carbon capture technologies is essential for meeting midcentury climate goals: carbon capture is critical to meeting the Paris Agreement 2050 two-degree warming target, and to achieve a near-zero carbon economy by mid-century.
In the next Congress, carbon capture will continue to present an opportunity for Congressional leaders from the left, right and center to support common sense solutions to advance American energy independence, jobs and economic development and reductions in carbon emissions.
