Coalition Weighs in On Federal Budget Areas Key to Commercializing Carbon Capture

On March 11, the Carbon Capture Coalition sent to Senate and House appropriators two letters outlining key Coalition priorities with regards to Fiscal Year 2021 spending levels.

Commercializing the carbon capture sector economywide in the timeline required to reach midcentury climate targets will require aggressive, sustained, and strategic federal investments.
Federal policymakers increasingly recognize that, similar to wind and solar, carbon capture will need a full portfolio of federal policies to achieve economywide deployment. This includes tax credits and other incentives, federal funding for research, development and demonstration (RD&D), and federal financing to leverage private investment in carbon capture projects that will spur continued innovation and improved performance, driving down costs and accelerating deployment.

Additionally, scale-up requires insuring that adequate staffing is in place at the federal and regional level to ensure proper and timely permitting of projects before the close of the commence construction window at the end of 2023 under the current authorization of 45Q.
The federal role in enabling the development of the carbon capture sector — from RD&D to project deployment to permitting – cannot be understated. The Carbon Capture Coalition requested targeted increases to two key areas of the fiscal year 2021 budget, the Department of Energy’s Office of Fossil Energy and the Environmental Protection Agency’s administration of the Underground Injection Control (UIC) Program.

The Department of Energy – Office of Fossil Energy

Within the Office of Fossil Energy lies the majority of current RD&D efforts to enable transformative changes to carbon capture, utilization, removal and storage technologies to drive down costs and accelerate economywide commercial deployment. The Carbon Capture Coalition specifically requests that the Carbon Capture and Carbon Storage programs at the Department of Energy be funded at least at $242,800,000, a $25,000,000 increase over last year, to support three additional specific R&D efforts:

1. An additional $15 million for front-end engineering and design studies (FEED) for carbon capture projects, and for industrial facilities to be eligible for FEED studies, in addition to power-sector facilities.
2. $10 million for research and optimization of carbon capture technologies at industrial facilities, a $6 million increase relative to FY2020 funding levels, with emphasis on building program structure for pilot-scale and demonstration projects.
3. $25 million for Carbon Use and Reuse, a $4 million increase relative to FY2020 funding, to continue research and development activities to support valuable and innovative uses for carbon, and that this increase be reflected in an overall increase to the Carbon Storage program.

Environmental Protection Agency – Underground Injection Control Program

The timeframes for application and approval of Class VI well permits and state Class VI primacy present already present a significant constraint on the 45Q tax credit achieving its full deployment potential. This situation risks being exacerbated by limited EPA and state resources and staffing to manage an anticipated significant increase in Class VI well permit and state primacy applications in response to 45Q, creating the prospect of policy failure with respect to commercial development of saline storage projects. It is estimated that once the U.S. Treasury issues final guidance for 45Q, up to two dozen projects will seek Class VI wells, and current EPA staffing levels for the Class VI program are inadequate to meet the expected increase in well applications in a timely manner

1. Request that in FY 2021, the EPA budget receive an increase of at least $4 million above the fiscal year 2020 level, to develop expertise and capacity at agency headquarters, specifically within the UIC program related to Class VI wells for geologic storage,
2. To begin building the capacity at the state level to support robust Class VI well programs, we request that in FY 2021, the EPA UIC State and Tribal Grant program receive at least $6 million above the fiscal year 2020 level.

These requests are in keeping with consensus recommendations in the Coalition’s first-ever federal policy blueprint released last year.

Click the links below to view the letters:

FY21_CCC_DOE_House

FY21_CCC_DOE_Senate

FY21_CCC_Class VI_Senate

FY21_CCC_ClassVI_House