Early this morning, the U.S. Congress took a landmark step by passing one of the most important bills for reducing global warming pollution in the last two decades. The FUTURE Act in the Senate, which was included in a sweeping two-year budget deal, will increase 45Q tax credits for practitioners of carbon capture, utilization and storage (CCUS). This will stimulate the development of projects and ultimately help make technology costs affordable around the world, as similar incentives have done for wind and solar.
The legislation provides financial certainty by guaranteeing eligibility for projects that commence construction within seven years of enactment, with credits claimed once carbon dioxide is captured and stored. Further, it increases the tax credit value by raising it to $35/ton for storage in enhanced oil recovery projects, and to $50/ton for other forms of geologic storage.
It was introduced by Senator Heitkamp (ND), and had 24 co-sponsors, with Senators Capito (WV) Whitehouse (RI), and Barrasso (WY) as major champions of the bill. Congressman Mike Conaway also introduced the companion Carbon Capture Act in the House of Representatives, with 49 co-sponsors. The bill is now headed to the President’s desk for signature.
“Passage of this legislation is a remarkable bipartisan achievement, particularly in the current political environment,” said Kurt Waltzer, Managing Director of Clean Air Task Force. “The fact that we had 17 Democrats, 6 Republicans and one independent sponsoring the Senate bill, and 35 Republicans and 14 Democrats behind the House bill, were critical factors in their successful passage.
“Today’s news should stimulate a number of new CCUS projects now on drawing boards across the country.” said Waltzer. “The UN’s Intergovernmental Panel on Climate Change (IPCC) has recognized CCUS as an absolutely essential tool in fighting global climate change, so we now have a powerful new weapon in that effort. So much more needs to be done, but this is a terrific start.”