WASHINGTON, May 25, 2021 – U.S. lawmakers have introduced the CATCH (Coordinated Action To Capture Harmful Emissions) Act to raise the value of the 45Q tax credit that incentivizes the deployment of carbon capture technologies, rounding out a legislative policy package that could help grow US carbon management capacity 13-fold by the mid-2030s.
“Carbon capture is critical to decarbonizing our global system, and we are witnessing unprecedented momentum. The bipartisan CATCH Act is an important piece in the puzzle to improve the current U.S. policy landscape for carbon capture, removal, and storage deployment. It aligns with President Biden’s American Jobs Plan and builds on the existing 45Q enhancement bills and the SCALE Act to invest in CO2 transport and storage”, said Lee Beck, International Director, Carbon Capture at Clean Air Task Force.
The bill is sponsored by Representatives Tim Ryan (D-OH), Anthony Gonzalez (R-OH), Cheri Bustos (D-IL), Tim Walberg (R-MI), Marc Veasey (D-TX), David McKinley (R-WV), Susan Wild (D-PA) and Kelly Armstrong (R-ND).
Carbon capture, removal, and storage technologies are important for the decarbonization of a host of different sectors in power and industry, as well as removing CO2 from ambient air. There are different costs for each application and, therefore, different levels of support are required to commercialize each of them. Incentivizing investment in carbon capture today will accelerate its deployment and reduce costs, and ultimately help scale its commercial use around the world.
This new legislation is an important complement to The 45Q Carbon Capture, Utilization, and Storage Tax Credit Amendments Act of 2021 in the Senate and the Access 45Q Act in the House, which include crucial further enhancements to the tax credit including, among other provisions, a direct pay option and a commence construction deadline extension. The provisions in the SCALE Act would help connect these facilities to and commercialize saline geologic storage of CO2 .
The key components of the CATCH Act are:
- New 45Q Values: Increases the 45Q credit value from $50 to $85 per metric ton for CO2 captured and stored in saline geologic formations and from $35 to $60 per ton for CO2 stored via enhanced oil recovery;
- Elimination of Thresholds: Eliminates the annual CO2 capture thresholds for power, industrial, carbon utilization and direct air capture projects, further encouraging many more carbon capture projects to move forward.
Beck continued: “The passage of 45Q in 2018 has led to the announcement of more than 40 U.S. carbon capture projects in the industrial and power sectors, and direct air capture. Over the past three years, we have learned more about what it takes to deploy these decarbonization technologies. These 45Q optimizations will not only help move these planned projects along, but will also spur further carbon capture deployment in new industries to achieve a net-zero U.S.”
Analysis has shown that the increased value of 45Q credits to $85 per ton of carbon removed is particularly important to deliver carbon capture deployment in higher-cost applications like cement and steel decarbonization, as well as the power sector, to achieve a clean grid by 2035. Moreover, the elimination of thresholds would allow more facilities to access the credit, in turn increasing the availability of carbon capture technologies.
“It is important to highlight how both capture and storage incentives and CO2 transport and storage infrastructure policy work together, and it is imperative to get the entire package right. Enhancing 45Q will drive investment into industrial and power sector decarbonization and carbon removal. The SCALE Act is crucial for connecting these facilities efficiently to commercialized saline geologic storage,” said Beck.
This piece of legislation comes on a streak of strong carbon capture momentum, including landmark investments from the governments in the Netherlands and Norway in CO2 transport and storage, and a host of bills introduced in the U.S. Congress. President Biden’s American Jobs plan presented in April also forms the largest proposed investment in carbon capture commercialization ever put forward by a single government, able to grow U.S. carbon management capacity 13-fold by the mid-2030s, according to CATF analysis.
The Clean Air Task Force today also released a Factsheet that outlines the full legislative picture on carbon capture, removal, and storage technologies in the current Congress.
About Clean Air Task Force
Clean Air Task Force (CATF) is a non-profit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid global development and deployment of low-carbon energy and other climate-protecting technologies. This is accomplished through research and analysis, public advocacy leadership, and partnership with the private sector. With nearly 25 years of nationally and internationally recognized expertise on clean air policy and regulations and a fierce commitment to fully exploring all potential solutions, CATF is an environmental advocacy group with the bold ideas needed today to solve the climate crisis. CATF is headquartered in Boston, with staff working virtually around the US and abroad.