Why the carbon capture subsidy in the climate bill is good news for emissions
But in the fierce debate about carbon capture, it is often assumed that the technology could also play important roles in accelerating emissions reductions in a variety of industries. That includes cleaning up heavily polluting industrial sectors such as cement, steel and fertilizer. These measures could also support the development of low-emission fuels and bioenergy known as bioenergy with carbon capture and storage capacity, or BECCS, which the United Nations climate council United Nations model relies heavily on drafting possible scenarios that prevent the planet from warming more than 2 ˚C above pre-industrial levels.
Ultimately, the subsidies will spur the development of the carbon dioxide pipelines and storage facilities needed to reliably move and sequester growing volumes of carbon dioxide over the coming decades, Paulina Jaramillo, professor of engineering and public policy at Carnegie Mellon University.
That will be crucial to reducing the cost of other carbon capture efforts, making it more affordable to clean up a wide range of products. It will also give a big boost to the growing efforts to suck greenhouse gases out of the atmosphere on a large scale, which is growing. research agency Detection will also be essential to controlling global warming. (This type of technology, called carbon removal, is different from capturing emissions before they leave a power plant or factory.)
The Repeat Project, a Princeton effort to model the impact of climate policies, estimate that the package will spur approximately $28 billion in annual capital investments in carbon dioxide transport and storage projects, as well as power plants with carbon capture equipment, by 2030. At that point, U.S. facilities will trap and sequester approximately 200 million tons of carbon dioxide per year, a 13 times increase about what could happen with just the infrastructure bill passed last year. According to the analysis, the amount of carbon sequestered will more than double by 2035. (For comparison, the nation’s total greenhouse gas emissions will reach about 5.6 billion tons in 2021).
“The IRA creates an opportunity for the United States to do” [carbon capture and storage] Julio Friedmann, chief scientist at Carbon Direct, a research, investment and advisory firm focused on carbon removal. “It provides opportunities to reduce pollution in communities, develop and test technologies, create clean-ups, and compete globally in trade and technology.”
IRA consists of hundreds of billions of grants, loans, federal procurement, and tax credits designed to drive research and development efforts, renewable energy projects, electric vehicle sales, manufacturing industry building clean energy, etc. In addition, it can accelerate the development of carbon capture and storage in a number of ways.
Most notably, it increases the so-called 45Q tax credit for carbon capture, removal and storage projects. With those larger subsidies, companies in certain sectors can break even or even profit from adding the necessary equipment and managing the carbon generated.
Follow an analysis of the law firm Gibson Dunn. It also increased that credit from $50 to $180 for facilities that remove carbon dioxide from the air and permanently store it, a process known as direct air capture.