It’s not the law of the land yet, but one of the most potentially impactful aspects of the bipartisan infrastructure bill for climate techies is the groundwork it lays for new economic opportunities based on capturing and sequestering carbon emissions.
The support for the so-called carbon management economy takes many shapes within the bill, and is largely based on the SCALE Act reintroduced earlier this year by senators on both sides of the aisle. (SCALE stands for Storing CO2 and Lowering Emissions). Some of the biggest monetary data points include:
- More than $8.5 billion in funding for industrial and direct air carbon capture technologies, including not just the equipment to suck up CO2 emissions but also transportation networks and pipelines to get it to places where it can be stored.
- A pool of $3.5 billion to create four regional hubs for direct air capture (DAC), each of which can draw down at least 1 million metric tons of CO2 annually (for perspective, that’s the emissions generated by about 120,000 U.S. homes).
- Roughly $2.5 billion over the next five years to help the Department of Energy create storage facilities for the captured carbon — not just in geologic formations but also in products such as cement or plastic.
An analysis by the Bipartisan Policy Center, Clean Air Task Force and Third Way estimates that these sorts of policies could create thousands of U.S. jobs — up to 13,000 annually, not including the potential for employment related to industrial factory retrofits or for building DAC plants. Even before it was passed, the Carbon Capture Coalition orchestrated a letter of support for the infrastructure investments as well as for enhancements to the 45Q tax provision, which provides incentives for corporations to build carbon capture facilities. (The letter is signed by more than 170 organizations from transport companies such as United Airlines to unions such as United Steelworkers and companies in infrastructure including LafargeHolcim and Honeywell.)?
"Enactment of the bipartisan infrastructure provisions and key complementary tax measures outlined in the letter could deliver economy-wide deployment resulting in an estimated 13-fold increase in carbon management capacity and annual emissions reductions of 210-250 million metric tons by 2045, spurring continued innovation and improved performance, while driving down costs and preserving and creating high-wage jobs that families and communities across the nation depend on," noted Brad Crabtree, director of the coalition, in a statement.
To help me mull the implications of the pending legislation, especially alongside the Intergovernmental Panel on Climate Change’s new assessment of where the world stands on climate change, I chatted with experts from the World Resources Institute (WRI) and the Clean Air Task Force (CATF). Among other things, I asked them to address criticism from some environmental groups that are skeptical about how much money to invest in carbon capture, which could be seen as perpetuating the prolonged use of fossil fuels.?
Even if we eliminated fossil fuels overnight, we would still need these things.
Dan Lashof, director of WRI for the United States, said fast permitting for carbon capture hubs as well as the infrastructure necessary for getting captured CO2 to places where it can be managed will both be critical for meeting the goals of the Paris Agreement. He pointed to the International Energy Agency’s strong advocacy of carbon capture and storage infrastructure, alongside accelerated investments in solar and wind generation capacity as one reason this investment is so important. "Even if we eliminated fossil fuels overnight, we would still need these things," Lashof told me.
Lee Beck, international director of carbon capture for CATF, said achieving the scale of carbon removal needed to limit global temperature increases to 1.5 degrees Celsius by 2050 will require the construction of thousands of facilities in the U.S., which will feed into networks that can benefit from shared costs. That’s the approach being used in Europe with Norway’s emerging Northern Lights carbon capture and storage project, backed by Shell, Total and Equinor. Industrial facilities across the region have committed to transporting captured CO2 to the site. It’s possible that a similar model could emerge in the U.S., Beck suggested. The clustering effect is already happening in places such as Texas, Nebraska, North Dakota and Illinois.
Alongside the infrastructure plans, Beck said a critical factor for success will be enhancements to the 45Q federal tax incentive. "The way we are approaching the crisis is a very technology-forward way," she said. "Innovation alone isn’t sufficient."
Among the changes being advocated in the Carbon Capture Coalition letter are a direct pay option for the incentive that will help those exempt from federal tax liability, a 10-year extension of the construction window for facilities, and a boost in the credit values including to a range of $60 to $130 per metric ton, depending on the capture and storage method.
All of these ideas, of course, are purely hypothetical until the bill (along with the massive $3.5 trillion proposed budget that includes even more climate tech and infrastructure measures) is considered and passed by the U.S. House of Representatives and President Joe Biden signs off. That body is due back in Washington, D.C. in late August, so this could take weeks.