Coalition Statement on President Biden’s FY2022 Budget Request
June 1, 2021 | Legislation
The Carbon Capture Coalition today issued the following statement on the release of President Biden’s fiscal year (FY) 2022 budget request and further details on the administration’s energy and industrial tax incentive priorities previously outlined in the President’s “American Jobs Plan.” This statement can be attributed to Coalition director Brad Crabtree:
“In its FY2022 budget request and accompanying revenue proposals, the Biden Administration continues to demonstrate its commitment to carbon management as a key component of a national strategy to reach net-zero emissions. Together with similar measures in bipartisan legislation before Congress, the President’s budget announcement further underscores the unprecedented bipartisan common ground and growing support for a broader and more complete portfolio of federal carbon capture policies that are essential to meeting midcentury climate goals, while preserving and growing America’s high-wage jobs base in energy, industry and manufacturing.
“Robust federal funding is critical for economywide deployment of carbon capture technologies, and the Biden Administration has called for modest but important increases in what it considers “climate-centric” carbon capture, carbon storage and carbon utilization programs at the Department of Energy in the President’s FY2022 budget request. Moving forward, additional significant annual increases will be crucial to reach the five-year funding authorization levels enacted as part of the bipartisan FY2021 omnibus spending package. As the appropriations process continues for FY2022, the Carbon Capture Coalition will continue to urge Congress and the administration to fully fund these programs at the levels authorized by the omnibus.
“The Coalition also commends the administration for including a direct pay option and a five-year extension for the Section 45Q tax credit, in its detailed FY2022 revenue proposals that accompanied the release of the budget. These represent the top two federal policy priorities of the Coalition. Direct pay will ensure that the full value of the 45Q credit flows directly to carbon capture, direct air capture and carbon utilization projects, avoiding the loss of a significant percentage of the incentive to tax equity transactions currently undertaken to monetize the tax credit. In addition, a five-year extension of 45Q will provide project developers and investors a ten-year window, through 2030, to plan, engineer, permit and finance projects, thereby ensuring that 45Q delivers on its full technology innovation, emissions reduction and job creation potential.
“Finally, the Coalition welcomes the administration’s proposal to increase the value of the 45Q credit from $50 per ton of CO2 captured and stored in saline geologic formations to $120 per ton for direct air capture projects and to $85 per ton for carbon capture projects in key industrial sectors, such as cement production, steelmaking, hydrogen production, and petroleum refining. Recent analysis by the Rhodium Group shows that an $85 per ton threshold is critical to achieving widespread carbon capture deployment in hard-to-abate industrial sectors, while putting them on a path to net-zero emissions by midcentury.
“Ultimately, the proposed increase in 45Q to $85 per ton for carbon capture projects must also encompass electric power generation, if the Biden Administration is to realize its goal of reaching net-zero in the power sector by 2035. Toward that end, the Coalition will continue to support bipartisan efforts in Congress, such as the Coordinated Action to Capture Harmful Emissions (CATCH) Act introduced last week in the House, which would boost the value of 45Q to $85 per ton for electric power and a wider array of industrial sectors.
“The Coalition’s 80-plus companies, unions and NGOs support the enactment of a comprehensive portfolio of measures for economywide deployment of carbon capture, removal, transport, utilization and storage. The Coalition is eager to work with President Biden and his administration and members of Congress across the political spectrum to pass bipartisan federal legislation this year that incorporates these key carbon management provisions.”
The Carbon Capture Coalition is a nonpartisan collaboration of more than 80 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 capture 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.