Since the passage of the 45Q tax credit in 2018, there has been unprecedented interest in carbon capture, utilization, and storage in the United States. Clean Air Task Force has tracked more than 40 new project announcements with our U.S. Carbon Capture Activity and Project Map, tracking project information in a table and visualizing prime details on an interactive map. The growth of new project announcements demonstrates that policy is driving investment in carbon capture. However, further policy support will be needed in order to unlock the massive potential of this technology, which scientists agree is critical to tackling climate change.
Key Trends and Project Announcements
- Since 2018, companies and governments have announced more than 40 carbon capture projects; announcing 10 in just the first half of 2021. At this pace, 2021 is on track to match 2019 for announcements, a good sign that appetite to deploy carbon capture and storage technologies has not subsided during the pandemic.
- Carbon capture and storage projects have been announced in 12 different states, and are generally concentrated in the center of the country and in California, near existing infrastructure and abundant geologic CO2 storage.
- Texas has the greatest number of carbon capture project announcements, followed by Illinois and Nebraska.
- A little more than half of announced projects are in the diverse industrial sector. Ethanol has the largest number of projects, but we are also seeing investments from other biofuels, cement, hydrogen, and gas processing facilities. The diversity in types of projects is important for innovation and to move us down the learning curve.
- Power sector carbon capture projects have been primarily in natural gas powerplants, but a biomass project using agricultural waste is being studied in California as well. The power sector has also seen storage hub project announcements, building on the growing enthusiasm for hubs in the U.S. and Europe. Finally, Texas will also be home to a large direct air capture project, which is a critical next step in carbon capture innovation.
- More than half of the announced projects are also considering dedicated geologic storage of CO2. The large amounts of captured carbon that will need permanent storage requires the buildout of significant storage infrastructure. These project announcements demonstrate the need for commercializing geologic storage to enable the sector to scale to the capacity required to achieve climate goals.
The cement sector is showing increased interest in carbon capture. In California, Lehigh Hanson and Fortera announced plans to capture CO2 emissions directly from a kiln at Lehigh Hanson’s Northern California cement facility and mineralize it to produce a cementitious material for use in concrete. Last year, a group of companies announced a joint study to explore a commercial scale capture facility at the Holcim Portland Cement Plant in Colorado. Considering the need to lower emissions and continue to produce cement, carbon capture will likely continue to grow in the cement industry.
The U.S. Carbon Capture Activity and Project Map visualizes project announcements in relation to geologic storage potential, showing that projects have been clustered near geologic storage. But sources of CO2 emissions are spread across the United States, even if storage potential is not. That is why CO2 transport infrastructure that connect capture facilities to storage are critical. Unfortunately, the CO2 infrastructure needed to support carbon capture projects outside of geologic storage areas is slow to develop because of the classic chicken-and-egg problem. Projects are needed to support infrastructure and infrastructure is needed to support projects.
Lack of infrastructure leads to clusters
Carbon management infrastructure in the Midwest
We see an exception, however, in the Midwest corn belt. This region is a prime location for a CO2 network because it has an abundance of Ethanol production, one of the cheapest industries for carbon capture to deploy, while also being outside of geologic storage locations. This creates an ideal scenario for CO2 transport as a connector between emitters and CO2 storage.
In fact, in April, Summit Carbon Solutions announced plans to connect 30 facilities, primarily biorefineries, to CO2 infrastructure for permanent geologic storage in North Dakota. The transportation infrastructure is expected to connect facilities in Iowa, Minnesota, North Dakota, South Dakota, and Nebraska. Going in the opposite direction, Navigator CO2 is partnering with Blackrock and Valero Renewables to develop a CO2 infrastructure project in the same region. The 1,200-miles of infrastructure would serve facilities in five states: Nebraska, Iowa, South Dakota, Minnesota, and Illinois. The CO2 infrastructure would transport captured CO2 to a sequestration facility in Illinois.
There are several opportunities for policymakers to build on the carbon capture momentum we see in this map, potentially enabling a 13-fold scale up of U.S. carbon management capacity. A portfolio of 45Q enhancements continues the support needed to grow carbon capture projects in diverse industries. It includes:
- Direct payments. Small project developers lack taxable income that would allow them to utilize 45Q or clean energy tax credits. Direct payments would provide the full credit value without the cost of utilizing a third party.
- Increased credit value. Different types of emissions sources have different costs to capture. This cost depends on the concentration of CO2 in the flue stream. Higher purity streams of CO2 are cheaper to capture and store than streams with lower concentrations. Increasing the value of 45Q for higher cost emissions sources is important for expanding the number of facilities that carbon capture makes sense for. Most applications will require at least $85 per metric ton, while direct air capture will need $180. The recently introduced CATCH Act contains provisions for increased industrial and power sector values.
- Extending the commence construction window. Currently, carbon capture projects must commence construction by the end of 2025 to be eligible for 45Q. Because these projects are complex and require years of planning, the window for construction needs to be extended. A ten-year extension, to the end of 2025, would give project developers the time and certainty needed to plan complex new projects.
- Eliminating eligibility thresholds. Capacity thresholds must be removed to increase the number of facilities that are eligible for 45Q. Presently, powerplants must emit 500,000 metric tons per annum of CO2 to qualify and industrial sources must emit more than 100,000 metric tons per annum of CO2. This arbitrarily limits carbon capture to only the largest emitters while excluding the numerous smaller carbon sources whose carbon capture efforts could spark innovation.
In addition to these 45Q enhancements, CO2 infrastructure needs support from policymakers. As this map shows, we need CO2 infrastructure in order to connect emitters located far from geologic storage. The chicken-and-egg problem can be addressed through policy, with the SCALE Act – which has already passed the Senate Energy and Natural Resources Committee – supporting infrastructure through four key pillars:
- Create a Secure Geologic Storage Infrastructure Development Program to provide DOE cost share for storage development.
- Provide the EPA with increased funding for permitting Class VI CO2 storage wells.
- Establish a program to finance shared CO2 transport infrastructure.
- Provide grants to states and localities to procure CO2 utilization products and to fund programs that create demand for utilizing captured carbon.
In the United States, public support for climate action and industry interest in carbon capture are at unprecedented levels. Policymakers should capitalize on this converging momentum to support the growth of carbon capture and storage projects. If the U.S. is truly committed to climate action, it must invest in carbon capture and storage now.
A Collaborative Effort
Clean Air Task Force created this map based on our open-access spreadsheet to track and visualize the growth of commercial interest in carbon capture and storage technologies in the United States. We also wanted to highlight storage availability and resources, along with the variety of carbon capture applications under development. CATF envisions this map as a living document with regular updates. If you would like to be included or see information that needs updating, please contact Marc Jaruzel at email@example.com.