Friday, September 29, 2023

Why the carbon capture subsidies in the climate law are good news for emissions

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But in the fierce debate on carbon capture, it is often forgotten that the technology can also play a crucial role in accelerating emission reductions in various industries. That includes cleaning up heavily polluting industrial sectors such as cement, steel and fertilizers. The measures could also support the development of low-emission fuels and so-called bioenergy with carbon capture and storage, or BECCS, which the UN Climate Panel’s models rely heavily on when outlining achievable scenarios that prevent the planet from going more than 2 warms up. C above pre-industrial levels.

Finally, the grants should encourage the development of carbon dioxide pipelines and storage facilities that will be needed to move and reliably capture the growing amounts of carbon dioxide in the coming decades, said Paulina Jaramillo, a professor of engineering and public policy at Carnegie Mellon. university.

That will be key to lowering the cost of other carbon capture efforts, making it more affordable to clean up a wider range of products. It will also give a major boost to the growing efforts to suck the greenhouse gas out of the atmosphere on a large scale, which a growing body of research says will also be essential to contain global warming. (This type of technology, also known as carbon removal, is different from capturing emissions before they leave a power plant or factory.)

The Repeat Project, a Princeton-based project to model the impact of climate policy, estimates that by 2030, the package will lead to approximately $28 billion in annual capital investment in carbon dioxide transportation and storage projects, as well as in power plants with carbon capture equipment. At that time, U.S. facilities would trap and store about 200 million tons of carbon and dioxide per year, a 13-fold increase about what would likely happen to just the infrastructure bill passed last year. According to the analysis, the amount of captured carbon will more than double by 2035. (By comparison, the country’s greenhouse gas emissions were about 5.6 billion tons in 2021.)

“The IRA creates an opportunity for the US to do” [carbon capture and storage] is right,” said Julio Friedmann, chief scientist at Carbon Direct, a research, investment and consulting firm focused on carbon removal. β€œIt provides opportunities to reduce pollution in communities, grow and test technologies, create clean jobs and be globally competitive in trade and technology.”

The details

The IRA includes hundreds of billions in grants, loans, federal tenders and tax credits designed to boost research and development efforts, renewable energy projects, electric vehicle sales, build a clean energy manufacturing sector and more. In addition, it could accelerate the development of carbon capture and storage in several ways.

Most notably, it increases the so-called 45Q tax credits for projects that capture, remove and store carbon. With those larger subsidies, companies in certain sectors could make a profit or even make a profit by adding the necessary equipment and managing the resulting carbon.

Specifically, the credit increases from $50 per metric ton to $85 per tonne for industrial plants and power plants that permanently store carbon dioxide in deep underground geological reservoirs, according to an analysis by the law firm Gibson Dunn. It also increases that credit from $50 to $180 for facilities that remove carbon dioxide from the air and store it permanently, a process known as direct air capture.

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