Bipartisan support is growing on Capitol Hill and beyond to accelerate carbon capture deployment on power plants and industrial sources like steel and cement plants. This support comes from lawmakers who share a common interest in increasing the production of domestic energy resources and reducing carbon emissions.
On July 12, a bill co-sponsored by 25 senators was introduced that would provide a performance-based incentive to capture CO2, put it to productive use, and store it safely and permanently underground.
The FUTURE Act (Furthering carbon capture, Utilization, Technology, Underground storage, and Reduced Emissions) would extend and expand a federal tax credit, known as Section 45Q, which incentivizes capturing carbon dioxide (CO2) from power and industrial sources for enhanced oil recovery (EOR) and other uses. CO2-EOR is a decades-old process that produces domestic oil from existing fields, while safely and permanently storing billions of tons of CO2. Recent analysis demonstrates its climate benefits.
Bill supporters cross the aisle and the country. They include Sens. Heidi Heitkamp (D-ND), Shelley Moore Capito (R-WV), Sheldon Whitehouse (D-RI), John Barrasso (R-WY), Tim Kaine (D-VA), and Lindsey Graham (R-SC).
Other bipartisan bills would help unleash private capital to scale up more carbon capture projects. The Carbon Capture Improvement Act, introduced in April by Sens. Rob Portman (R-OH) and Michael Bennet (D-CO), would authorize states to use private activity bonds to help finance carbon capture equipment. A companion bill was introduced by Reps. Carlos Curbelo (R-FL) and Marc Veasey (D-TX). Private activity bonds are widely used to develop U.S. infrastructure, such as airports and water and sewer projects. (Join a free C2ES webinar on private activity bonds July 24.)
This broad and growing support for carbon capture extends beyond Congress:
- The Western Governors Association has publicly called for federal incentives for carbon capture projects, infrastructure, and research.
- The Southern States Energy Board issued a resolution supporting carbon capture and storage.
- The National Association of Regulatory Utility Commissioners urged Congress and the administration to support state efforts to store and use manmade CO2 by providing funding and incentives for research.
The broad consensus for accelerating carbon capture is reflected in a coalition convened by the Center for Climate and Energy Solutions and the Great Plains Institute: the National Enhanced Oil Recovery Initiative (NEORI). The coalition brings together coal, oil and gas, electric power, ethanol, chemical and energy technology companies, labor unions, and national environmental organizations dedicated to expanding deployment of carbon capture as an energy, economic, and environmental solution.
More than a dozen commercial-scale carbon capture, use and storage projects are operating in the U.S., including at natural gas processing facilities, fertilizer plants, and ethanol plants.
In April, the Archer Daniels Midland ethanol plant in Decatur, Illinois, became the world’s first commercial-scale biofuels facility with carbon capture technology. The Illinois Industrial Carbon Capture and Storage project will capture and store more than 1 million tons of CO2.
In January, NRG began operating the first U.S. retrofit of a coal-fired power plant with carbon capture technology. Petra Novanear Houston, Texas, is the largest project of its kind in the world, and it came in on time and under budget. The approximately 1.6 million tons of CO2 it will capture annually is used for enhanced oil recovery and stored underground.
We are still in the early stages of deploying carbon capture technology in the power sector and there are many opportunities for learning by doing and reducing costs.
As C2ES President Bob Perciasepe said on the release of the 45Q bill, “We have the technology. We just need help deploying more of it.”
Improved incentives like providing access to private activity bonds and strengthening and extending the Section 45Q tax credit for carbon dioxide storage could help create conditions like those that enabled wind and solar energy to speed deployment, grow U.S. energy sector jobs, cut energy costs, and reduce emissions.
Policymakers have an opportunity to build on growing momentum and bipartisan interest in carbon capture technology as a key strategy to increase American energy independence and reduce carbon emissions.