WASHINGTON — U.S. Senators introduced the CATCH (Coordinated Action To Capture Harmful Emissions) Act today, which raises the value of the 45Q tax credit, a crucial incentive for accelerating carbon capture and storage projects.
“Carbon capture is critical to decarbonizing our global energy system, and its momentum in the U.S. is at an all-time high. We are thrilled to see the CATCH Act introduced in the Senate, as it is an important piece of the puzzle to improve the current U.S. policy landscape for carbon capture, removal, and storage deployment. It also 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 of Carbon Capture at the Clean Air Task Force.
The CATCH Act was first introduced in the House in May of this year, rounding out a legislative policy package that could help grow critically needed U.S. carbon management capacity 13-fold by the mid-2030’s. Clean Air Task Force released a factsheet that outlines the comprehensive carbon capture package, and demonstrates how carbon capture incentives and CO2 infrastructure and storage policies like the SCALE Act will work together to expand carbon management capacity for a net-zero emissions U.S.
The CATCH Act is sponsored by Senators Ben Ray Luján (D-NM), John Barrasso (R-WY), Tina Smith (D-MN), Chuck Grassley (R-IA), Chris Coons (D-DE), Debbie Stabenow (D-MI), John Hoeven (R-ND) and Kevin Cramer (R-ND) and 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. These include crucial enhancements to the tax credit, including, among other provisions, a direct pay option and a commence construction deadline extension. The infrastructure provisions in the SCALE Act would help connect carbon capture 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.
“The passage of 45Q in 2018 has led to the announcement of more than 40 US. carbon capture projects in the industrial and power sectors, as well as direct air capture, foreshadowing the impact an improved 45Q could have, particularly if coupled with appropriate infrastructure and CO2 storage policy like the SCALE Act but to decarbonize the power and industrial sectors, we will need many more,” said Beck. “Increasing investment in carbon capture projects today will reduce costs and accelerate its deployment tomorrow, ultimately leading to commercial scale use around the world.”
Carbon capture and storage technologies are important for decarbonizing a host of sectors in power and industry, as well as removing CO2 directly from the ambient air. Different types of carbon capture projects have different costs, which is why different levels of support are required to commercialize each of them.
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. Eighty-five dollars per ton is important for the power sector to achieve a clean grid rapidly, as well. Moreover, the elimination of project size thresholds would allow more facilities to access the credit, increasing the availability of carbon capture technologies.
Beck continued: “Capture and storage incentives are designed to work hand-in-hand with CO2 transport and storage infrastructure policy, so 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.”
This piece of legislation builds on recent 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.
Troy Shaheen, Communications Director, U.S., [email protected], +1 845-750-1189
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. We work towards these objectives 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 headquartered in Boston, with staff working virtually around the U.S. and abroad.