Carbon Capture Bills Gathering Steam in Congress
Several bills creating benefits and financing for carbon capture have been introduced in Congress and are seeing movement through bipartisan support. Carbon capture, also known as carbon capture, utilization, and sequestration (CCUS), is the process of gathering carbon dioxide (CO2) emissions, typically from sources such as coal-fired power plants. Once captured, the greenhouse gas is usually stored or reused so it does not enter the atmosphere, where it is harmful to the environment.
The emergence of direct air capture (DAC) technology, which allows CO2 to be captured directly from the atmosphere, enhances the outlook of CCUS. “Scientists say that these emerging [CCUS] technologies, neither of which is economically available at scale, are going to be needed in potentially large amounts in order for the U.S. to go from the second-largest emitter of greenhouse gases, to a nation that absorbs more carbon than it releases,” says Axios.
Bills with Bipartisan Support
Carbon Capture Improvement Act
Senators Michael Bennet (D.-Colo.) and Rob Portman (R-Ohio) introduced the Carbon Capture Improvement Act on May 26, 2021. The bill aims to help industry finance CCUS and DAC technology.
“The bill would permit businesses to use private activity bonds, which local and state governments currently have access to, in order to finance a carbon capture project,” according to Axios.
Private activity bonds (PABs) are tax-exempt, can be paid back over longer periods of time, and are currently used to finance projects such as docks, airports, and sewage facilities.
“Under this bill, if more than 65 percent of carbon dioxide emissions from a given facility are captured and injected underground, then 100 percent of the eligible equipment can be financed with PABs,” notes Portman’s website. “If less than 65 percent is captured and sequestered, then tax-exempt financing is permitted on a pro-rated basis. PABs have been used for decades to finance pollution control equipment at U.S. power and industrial facilities; capturing carbon dioxide is a logical next step. The bill would also allow facilities to utilize the existing 45Q tax credit for carbon sequestration for industrial emissions.”
“This bill is a win-win for jobs and the environment, and I’m proud to continue my work on this issue with Senator Bennet,” says Portman in a press release. “Carbon capture and [DAC] are common-sense technologies that will allow states like Ohio to continue to utilize our natural resources while protecting our environment at the same time. This bipartisan measure is supported by business groups, energy groups, and environmental groups alike, and I urge all of my colleagues to support it.”
Representatives Tim Ryan (D-OH), Anthony Gonzalez (R-OH), Cheri Bustos (D-IL), Tim Walberg (R-MI), Marc Veasey (D-TX), David McKinley (R-WV), Susan Wild (D-PA), and Kelly Armstrong (R-ND) introduced the Coordinated Action to Capture Harmful (CATCH) Emissions Act on May 25, 2021. This act will boost 45Q tax credits for power plants and other industrial facilities to implement CCUS technology.
“The CATCH Act establishes the following credit levels:
- an $85 per metric ton credit level for industrial and power generation facilities seeking to securely store captured CO2 in saline geologic formations; and
- $60 per metric ton for storage in oil and gas fields and for the beneficial utilization of captured carbon to manufacture low and zero-carbon fuels, chemicals, building products, advanced materials and other products of economic value.
Recent analysis by the Rhodium Group underscores the potentially transformative impact of key provisions in the CATCH Act. Together with direct pay and a ten-year extension of 45Q, the increased credit values provided for in this bill would result in an estimated 212-252 million metric tons of carbon capture capacity by 2035 in the U.S. industrial sector alone. Additionally, higher 45Q values lead to increases in capture capacity of up to 61 percent at hydrogen plants, 79 percent at refineries, and 386 percent at cement facilities. Without these provisions, the Rhodium Group finds no carbon capture deployment at domestic iron and steel plants. The projected $12-15 billion in total investment [through] 2035 translates into an estimated 60,700-78,600 additional job-years over the time period,” according to Ryan’s website.
Senators Chris Coons (D-Del.) and Bill Cassidy, MD (R-La.), as well as Veasey and McKinley, introduced the Storing CO2 And Lowering Emissions (SCALE) Act on March 17, 2021. The bill will assist in the development of CCUS infrastructure to reduce CO2 emissions.
“The SCALE Act is the first comprehensive CO2 infrastructure package to be introduced in Congress,” according to Coons’s website. “The bill would support the buildout of infrastructure to transport CO2 from the sites of capture to locations where it can be either utilized in manufacturing or sequestered safely and securely underground.
“The legislation would also provide critical regional economic opportunities and create thousands of jobs. An analysis released as part of the Decarb America Project shows that the provisions in the SCALE Act could create approximately 13,000 direct and indirect jobs per year through the 5-year authorization. This figure does not include the additional thousands of jobs created by retrofitting energy-intensive facilities such as cement and steel plants or by building [DAC] plants.”
Specifically, the bill would:
- Establish the CO2 Infrastructure Finance and Innovation Act (CIFIA) program to provide low-interest loans and grants for new infrastructure projects.
- Build upon the existing Department of Energy CarbonSAFE program to provide cost sharing for deployment of commercial-scale saline geologic CO2 storage projects.
- Authorize increased EPA funding to permit Class VI CO2 storage wells in saline geologic formations, and provide grants for states to establish their own Class VI permitting programs.
- Provide grants to state and local governments for procuring CO2 utilization products, and support state and local programs that create demand for items created from captured carbon.
This bill (S.799) has been referred to the Senate Committee on Energy and Natural Resources.
USE IT Act
Senators John Barrasso (R-WY) and Sheldon Whitehouse (D-RI) reintroduced the Utilizing Significant Emissions with Innovative Technologies (USE IT) Act in February 2021. The bill was also sponsored by Senators Shelley Moore Capito (R-WV), Tom Carper (D-DE), Tammy Duckworth (D-IL), Kevin Cramer (R-ND), Tina Smith (D-MN), Joe Manchin (D-WV), and Mike Enzi (R-WY).
This act supports DAC research and carbon utilization by:
- Amending the Clean Air Act (CAA) to direct the EPA to support carbon utilization and DAC research;
- Clarifying that CCUS projects and CO2 pipelines are eligible for the permitting review process established by the Fixing America’s Surface Transportation (FAST) Act;
- Directing the Council on Environmental Quality (CEQ) to create guidance for project developers and operators of CCUS facilities and CO2 pipelines;
- Establishing task forces to hear input from affected stakeholders for updating and improving guidance over time; and
- Building on the FUTURE Act and bipartisan legislation—now signed into law and introduced by Barrasso, Whitehouse, and Capito—to extend and expand the 45Q tax credit to provide certainty to utilities and other industrial sources and incentivize the build-out of CCUS projects.
The USE IT Act has passed into law. Senators are pushing the CEQ for implementation of the act, according to Capito’s website.
Biden’s American Jobs Plan
President Joseph Biden Jr.’s American Jobs Plan covers 27 pages, with 1 important paragraph containing “the most significant investment proposal to commercialize carbon management technologies ever put forward by a single government,” according to an article by Lee Beck published by the Clean Air Task Force (CATF).
“The Plan could grow US carbon management capacity by more than 13-fold by 2035 while safeguarding and creating tens of thousands American jobs and establishing the US as a global leader in innovation and decarbonization,” the article says. “The American Jobs Plan is also a significant part of the new [U.S. Nationally Determined Contribution], which mentions carbon capture as part of the decarbonization pathways for industry and electricity.”
CCUS and DAC Technologies
The development of CCUS and DAC technologies is widely supported by many companies and unions, including GE Gas Power, Air Liquid, ACL-CIO, Mitsubishi Heavy Industries America Inc., National Farmers Union, Occidental, Shell, and United Steelworkers.
Some types of CCUS are already in use, such as chemical absorption from the production of ammonia and processing natural gas and the reuse of CO2 in fertilizer production.
“The technical challenge has been scaling-up and adapting petrochemical industry technology to larger gas volumes, lower pressures, and lower CO2 concentrations,” according to Power magazine. “This challenge appears to have been met by the Petra Nova project in Texas, a $1 billion demonstration project funded with federal and private investment. Petra Nova used amine-washing of the flue gas to remove 90% or more of the CO2 from a 240 MW slipstream at NRG’s coal-fired W.A. Parish Unit 8.”
Unfortunately, a decline in oil production and prices ultimately made the project a financial failure, and it was “mothballed,” notes Power.
Technologies on the horizon for DAC include “everything from synthetic trees to enhancing the ability of natural systems to soak up carbon,” says Bennet, who adds that the future is bright for these technologies. Bennet adds these technologies must be supported to address climate change concerns and the future of workers in the fossil fuel sector.
The high costs of further developing these technologies make it imperative that bills to finance infrastructure and research and development activities receive further bipartisan support so they are passed into law.
This article appeared on the EHS Daily adviser website at https://ehsdailyadvisor.blr.com/2021/06/carbon-capture-bills-gathering-steam-in-congress/]]>