POWER February 2020 - 52

COMMENTARY
Policy Support for Carbon
Capture Critical to Clean
Energy Future
Jennifer Christensen
A
nalysis by both the Intergovernmental Panel on Climate
Change and International Energy Agency shows that
achieving a zero-carbon energy system by 2050 will require
large-scale deployment of carbon capture technology in the electric
power generation and industrial sectors. Commercial-scale
carbon capture has been deployed for decades in some industries,
and commercial-scale post-combustion carbon capture retrofits
of power plants are operating successfully in the U.S. and
Canada. Now, the world needs to accelerate and deploy projects
across industry sectors to achieve a critical mass of commercial
deployment by 2030 sufficient to reach the economywide scale
needed to meet midcentury decarbonization targets.
Economywide deployment is possible, yet can only be realized
through increased public and private investments. Carbon
capture deployment can sustain and create high-wage jobs
while reducing emissions from key sectors, including industries
that are otherwise difficult to decarbonize.
Role of Federal Policy in Increasing U.S. Deployment
The primary challenges to carbon capture are not technical but of
public policy and political will. A portfolio of federal policy support
comparable to what has fostered the commercialization of other
low- and zero-carbon technologies could reduce uncertainty
among investors and project developers about applying carbon
capture in specific industries, build out infrastructure, support
the expansion of saline geologic storage, and grow new markets
for captured carbon (carbon dioxide and carbon monoxide).
Carbon capture projects are capital intensive and take years to
develop. Despite decades of commercial experience, the largescale
application of capture technologies in some sectors (such as
power generation) remains relatively recent, creating uncertainty
and risk. More infrastructure is also needed to link carbon capture
facilities to geologic storage or beneficial use locations.
Federal policy could play a critical role in leveraging increased
private investment in projects and infrastructure, spur
innovation, and reduce costs. It could also support emerging
industries that use captured carbon for beneficial use. Incentivizing
early commercial deployment is especially important
in industries that lack readily-available emissions reduction alternatives,
including industrial processes where carbon emissions
are inherent to the chemistry of the process.
Bipartisan Support and Multisector Interest Grow
Fortunately, a remarkably broad set of interests and a growing
number of leaders from both political parties in Congress are
working on policies to support carbon capture, building on the
successful reform and expansion of the 45Q tax credit for carbon
capture in 2018 that laid the foundation for jump-starting the
U.S. industry. In May 2019, the Carbon Capture Coalition (convened
by the Great Plains Institute) released a " Federal Policy
Blueprint " outlining the portfolio of policies needed to achieve
52
econom ywide deployment, reflecting a consensus of the Coalition's
more than 70 companies, unions, and non-governmental
organizations. In a sign of progress, several bipartisan bills have
been introduced in Congress to build on 45Q. They include:
■ USE IT Act (Utilizing Significant Emissions with Innovative
Technologies). Expands federal support for research, development,
and demonstration of carbon utilization and direct
air capture technologies, and aims to streamline the planning,
siting, and permitting of pipeline infrastructure.
■ Carbon Capture Modernization Act. Reforms the Section
48A tax credit to improve access to available incentives for
carbon capture retrofits of existing coal-fired facilities.
■ Carbon Capture Improvement Act. Authorizes the use of
tax-exempt private activity bonds to finance carbon capture
equipment installed at power plants and industrial facilities.
■ Fossil Energy Research and Development Act/EFFECT Act
(Enhancing Fossil Fuel Energy Carbon Technology Act). Increases
funding for federal research, development, and
demonstration and retooling efforts at the federal level to
advance carbon capture, use, removal, and geologic storage.
■ LEADING Act (Launching Energy Advancement and Development
Through Innovations for Natural Gas). Complements
the EFFECT Act and establishes a federal program to support
greater research and development for carbon capture in
natural gas facilities.
■ Financing Our Energy Future Act. Supports project financing
by expanding eligibility for master limited partnerships
to include carbon capture and utilization projects, along with
other low- and zero-carbon energy technologies.
■ Clean Industrial Technology Act. Establishes a federal program
to develop and deploy industrial emissions reduction
technologies and provide technical assistance for commercial
application of such technologies.
Policy incentives are starting to spark project investment.
Just recently, the Global CCS Institute announced updates to its
global project database, including eight U.S. projects. While 45Q
is a game-changer, a delay in U.S. Department of Treasury and
IRS guidance has put project deployment potential in jeopardy.
While IRS guidance is anticipated soon, the delay has limited
the credit's impact because projects must begin construction
before Jan. 1, 2024, yet lack the rules of the road. The Carbon
Capture and Sequestration Extension Act was recently introduced
in the U.S. House of Representatives to extend the 45Q
commence construction date by one year, which would restore
one of the two years lost to guidance delay.
Carbon capture is ready for deployment-the question now
is whether leaders will marshal sufficient support for economywide
deployment in time to meet decarbonization targets. ■
-Jennifer Christensen is managing editor and senior writer at
the Great Plains Institute, a nonpartisan, nonprofit organization.
www.powermag.com
POWER | February 2020
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POWER February 2020

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