Carbon Capture Coalition backs CCU Parity Act
The Carbon Capture Coalition has endorsed the Captured Carbon Utilization Parity Act, which addresses a key gap in tax-based carbon management policy for carbon reuse projects.
The bill was introduced this week in the Senate (S. 542) by U.S. Sens. Sheldon Whitehouse (D-RI) and Bill Cassidy (R-LA) and in the House of Representatives (H.R. 1262) by U.S. Reps. David Schweikert (R-AZ), and Terri Sewell (D-AL).
“The introduction of the CCU Parity Act further strengthens the 45Q tax credit by closing the cost gap for projects recycling captured carbon into low- and zero-carbon products, making them more economically viable to produce,” Coalition Executive Director Jessie Stolark said. “This legislation marks a pivotal next step in the continued deployment of carbon management technologies focused on the beneficial reuse of captured carbon, and we look forward to working with the bill sponsors to ensure its swift passage.”
Carbon captured from industrial and power facilities and direct air capture technologies is critical in reducing greenhouse gas emissions. Carbon reuse can potentially reduce current annual global CO2 emissions by up to 10 percent, according to the Global CO2 Initiative Roadmap. This includes reductions from among the largest sources of industrial carbon emissions, such as steel, cement, chemicals, and refining, as well as power generation. All of these feature lower concentrations of CO2 relative to other industrial sources of CO2, thus increasing the per-ton costs of capture.
This new bill fills a key gap in the federal policy framework dedicated to scale up the full value chain of carbon management technologies. It does this by establishing parity for the reuse of CO2 or its precursor CO to produce products with those projects seeking to safely and permanently store captured CO2 in geologic formations. Thus, the CCU Parity Act would support carbon reuse technologies and products that are not yet competitive with other well-established products and processes or face barriers to market entry by providing the 45Q tax credit.
Specifically, it would provide $85 per metric ton for industrial and power generation facilities seeking to reuse captured carbon in the manufacturing of low- and zero-carbon products, including fuels, chemicals, building products, advanced materials, and other products of economic value.
Also, it would provide $180 per metric ton for direct air capture projects beneficially reusing captured carbon to manufacture low and zero-carbon fuels, chemicals, building products, advanced materials, and other products of economic value.
“The introduction of the CCU Parity Act builds upon the unprecedented bipartisan efforts to bolster federal incentives and funding for carbon capture, removal, reuse, transport, and storage in the 117th Congress. It further solidifies the role the full value chain of carbon management technologies must play in reducing greenhouse gas emissions and decarbonizing the American economy while retaining and providing good-paying jobs that families and communities depend upon,” Stolark said.
