The US is trying to balance climate and economic considerations – CCS is getting more attention
Following the United States’ re-entry into the Paris Agreement and new, ambitious targets for net-zero by 2050, much has happened in the areas of energy and climate policy that may have an impact on the development of CCS in the United States.
Scheme for financing industrial CCS projects
These events have affected the scheme for financing industrial CCS projects – known as 45Q – which has now been proposed to be revised to provide increased flexibility, broader scope, a longer timeframe and – last but not least – more money. The new proposal involves payment of up to $85 per ton for CO2 captured and stored from sources such as steel and cement and $120 for Direct Air Carbon Capture and Storage (DACCS) projects. In addition, Biden’s comprehensive infrastructure plan went a step further in July. This step provides space to support new CCS infrastructure. In July, there was also a positive development in political negotiations on the draft law (SCALE act) to legitimize support for the development of infrastructure projects for CCS. This is intended for projects that fall outside the 45Q scheme.
Development in CCS-related projects among industry players
Recently, there has also been notable development of CCS-related projects among industry players. In April, for example, ExxonMobil announced plans for a giga CCS project with a hub in Houston, Texas, with the ambition of upscaling to 100 Mt CO2 stored per year by 2040. The concept will depend on public incentives, money and goodwill. More specific projects have also been announced, including projects related to LNG production and hydrogen in other industries.
Political roadmap for establishing CCS infrastructure in the United States
In July, another initiative was announced by the think tank Energy Futures Initiative (led by former Energy Minister Ernest Moniz), together with an association of trade unions, on a political roadmap for establishing CCS infrastructure in the US on a gigaton scale. In addition to the effect these measures will have on the climate the road map places great emphasis on the fact that these measures will also contribute to the preservation of jobs in industries that it is challenging to decarbonize. The media reports that the roadmap has been well received in and is being discussed in congress. Nevertheless, there are still political debates related to continued investment in fossil fuels that are taking place within the US government. Recently the US Special Envoy for Climate Change, John Kerry, reiterated the IEA’s message that we should not invest more in fossil fuel at the same time as the government approved such new projects.
This is part of the CCS Environmental Analysis for June and July 2021, prepared by Gassnova's analysis team.
Read the whole analysis here.