A bipartisan group of lawmakers have introduced a bill in the US House of Representatives to increase the value of the 45Q tax credit for carbon capture projects and expand eligibility.
The bill, named the Coordinated Action to Capture Harmful Emissions (CATCH) Act, eliminates the annual CO2 capture threshold industrial facilities and power plants currently have to meet to qualify for the tax credit. That could support more development of carbon capture projects, the Carbon Capture Coalition said.
Roughly 54pc of power plants and 75pc of industrial facilities do not capture enough CO2 to meet current limits to qualify for the 45Q tax credit, the Carbon Capture Coalition estimated, "and many direct air capture and carbon utilization projects deploying emerging technologies simply lack the scale to meet these requirements."
The bill, introduced yesterday by representative Tim Ryan (D-Ohio), also raises the value of the credit project owners can claim to $85/metric tonne for CO2 captured and stored in saline geologic formations and $60/t for storage in oil and gas fields and for projects using CO2 to make zero-carbon fuels, chemicals and other products. The current credits are $50/t and $35/t, respectively.
"Not only will this legislation help us meet our climate targets, including our businesses in this endeavor will help support our workers in northeast Ohio and across the country," Ryan said.
Representatives Anthony Gonzalez (R-Ohio), Cheri Bustos (D-Illinois), Tim Walberg (R-Michigan), Marc Veasey (D-Texas), David McKinley (R-West Virginia), Susan Wild (D-Pennsylvania) and Kelly Armstrong (R-North Dakota) are also initial sponsors of the legislation.
The bill is among a handful of measures introduced in the House and Senate this year to try to bolster carbon capture deployment. These include a measure introduced by representative David Schweikert (R-Arizona) last month that would assign the same credit levels as the CATCH Act but lowers the threshold for qualifying for the credit rather than eliminating it. A bill introduced by senator Tina Smith (D-Minnesota) in March that would increase the credit value for direct air capture projects.
Other bills that have been introduced are aimed at easing participation in the 45Q program and extending the deadline for projects to start construction, which proponents have said is necessary to support carbon capture projects. Project operators currently must start construction by 2026 to qualify for the credit.
President Joe Biden also included a provision in his $2 trillion infrastructure proposal to modify and expand the 45Q tax credit.
The bills "form the first-ever comprehensive carbon capture, removal, and storage commercialization policy package and could grow US carbon management capacity 13-fold by the mid-2030s, according to our analysis," said Lee Beck, international director of the Carbon Capture, Clean Air Task Force.
But none of the measures introduced in the House and Senate have been voted on in committee.
