EPA’s golden opportunity to dramatically reduce climate pollution from the U.S. fossil fuel-fired power fleet

Pollution standards are designed to ensure that polluters control their emissions instead of imposing them on people and the planet. They also recognize that the investment in reducing pollution, even if some costs are eventually passed onto consumers, is paid back 30-fold in benefits. This is a better ratio than even Ben Franklin contemplated when advising Philadelphians in 1735 that “an ounce of prevention is worth a pound of cure.”  

With this in mind, and pursuant to Congress’s instructions in the Clean Air Act, EPA has improved public health over the decades by reducing major pollution problems including from a wide variety of industrial and transportation sectors. What’s more? They’ve done it during periods of immense economic growth.    

The IPCC Sixth Assessment Report found last month that current CO₂ concentrations are higher than in any time in at least the last two million years and that burning uncontrolled fossil fuels is the number one cause of climate change. Meanwhile, carbon capture and sequestration provides the opportunity to nearly eliminate climate pollution from power plants and EPA is prepared to propose pollution controls based on the best system of pollution control, considering costs.  

In 2015, EPA found partial carbon capture and sequestration cost reasonable for new coal plants, and based emission standards on the capability and availability of the technology. Now eight years later, with climate change intensifying, additional carbon capture deployment, improved performance, and greater incentives, the Clean Air Act demands that the technology set the standards for the remainder of the fleet.  

Just how much does installing and operating carbon capture and storage on power plants cost? The Department of Energy (DOE) has been investigating the latest cost details for carbon capture and sequestration projects and released a series of reports over the past few months. The reports examine new and retrofit capture and sequestration projects for both natural gas and coal-fired power plants. For the first time, DOE examined a range of capture levels, including 90%, 95%, and 97% for gas, and 90%, 95%, and 99% for coal. At the highest levels of capture, the concentrations of CO₂ are so low in the stack rival that they rival those in the atmosphere.   

The table below summarizes the capture costs from DOE’s October 2022 report on new coal and gas plants with carbon capture. These are the costs for installing carbon capture on large, baseload power plants.  

Cost of Capture for New Coal and New Gas Plants at Different Capture Levels 

($/metric ton of CO₂, excludes the cost of CO₂ transport and storage) 

The capture costs, as expressed as total tons of CO₂ removed on a dollar-per-metric-ton, are relatively constant across capture levels. Because coal plants emit much more CO₂ than gas plants, their cost of capture as measured on a dollar-per-ton basis is less than that of a gas plant. 

DOE also recently released reports on the cost of retrofitting existing coal and gas plants with carbon capture. Generally, installing carbon capture on an existing plant tends to cost more than if the equipment can be optimized and installed simultaneously when a new power plant is built—the table below reports DOE’s retrofit costs for existing coal and gas plants.

Cost of Capture for Existing Coal and Existing Gas Plants at Different Capture Levels 

($/metric ton of CO₂, excludes the cost of CO₂ transport and storage) 

CCS costs have declined since EPA found them reasonable for the 2015 new coal plant standards and at that time tax incentives for permanently storing carbon were only $20/tonne. But, last year, Congress updated and expanded the 45Q tax credit. With passage of the Inflation Reduction Act, the credit increased from $50 to $85/tonne for power generation facilities storing CO₂ in saline geologic formations.  

The costs shown above are not directly comparable to 45Q tax credits. The costs in the tables exclude CO₂ transport and storage. Transport and storage costs can vary widely according to distance from the plant, geology of the injection formation, and quantity of CO₂ transported. Also, existing plants may be more likely to treat the financing of capture equipment over 12 years rather than the 30-year period often assumed in the tables above. Finally, first carbon capture installations cost more than later ones built after several plants are constructed and optimized – learning-by-doing will result in additional cost declines.  

Another recent DOE report, Pathways to Commercial Liftoff: Carbon Management, uses 12-year payback periods, a range of transport and storage ($10-$40 per metric ton), and considers first/Nth plant impacts. For retrofitting coal plants, the low cost is $63 per metric ton to capture, store and inject CO₂ underground. For natural gas plants, the range begins at $96 per metric ton for capture, transport, and storage. The upper-end costs described in the Pathways report are much higher. However, they do not help evaluate a world characterized by emission standards plus 45Q tax credits because plants at this high-end range are poor candidates to install carbon capture and storage. These plants generally are operating infrequently or approaching the end of their useful life.  

EPA must set emission standards for baseload power plants based on what can be achieved by the best system of emission reduction. Carbon capture and sequestration is that system, and standards based on it impose minimal costs. On the flip side, failure to seize this golden opportunity bears a much greater cost: significant additional harm to public health and welfare. We can’t afford that.