![]() Between 20, four announced CCUS facilities specifically cited the 45Q tax credit as a key driver for the project. 12 With the existing levels of the 45Q tax credit, a few CCUS facilities are starting to become economic. 11 Facilities that capture over 25,000 tons of CO 2 per year and utilize the captured CO 2 for other purposes, such as production of synthetic fuels, also qualify. The credit applies to power plants that capture over 500,000 tons of CO 2 per year and to industrial facilities that capture over 100,000 tons of CO 2 per year. The main method by which the United States currently incentivizes CCUS is through the 45Q tax credit, which as of 2021 provides $36 per ton of CO 2 stored in geological reservoirs or $24 per ton of CO 2 used in EOR or utilized for other purposes. That would require either decreased CCUS costs through technological innovation, or increased revenue from CCUS, such as government subsidies or the development of new, high-value uses for the captured carbon. 10 As noted, absent regulation requiring the use of CCUS, the technology needs to become more economical in order for deployment in the United States to expand significantly. 9 This is orders of magnitude less than what is typically predicted to be needed in strategies for achieving net-zero emissions, with estimates of up to 1.8 Gt of CO 2 per year captured across over 1,000 facilities for some net-zero scenarios. 8Īltogether, CCUS facilities in the United States currently capture around 20 Mt of CO 2 per year. This was the case with the Petra Nova coal power plant equipped with CCUS in Texas, which used captured CO 2 for EOR but nevertheless closed in 2020. On the other hand, low oil prices can undermine the commercial viability of projects that couple CCUS with EOR. 7ĮOR can provide a revenue source for CCUS sufficient to make a project economical in the absence of enough revenue from a carbon price or CCUS tax credit. All but one use the captured CO 2 for enhanced oil recovery (EOR), where captured CO 2 is injected into oil-containing geologic formations to ease extraction of hard-to-recover oil. 6 Of the facilities in the United States, four are deployed in natural gas processing, three in ethanol production, three in fertilizer production, one in syngas production, and one in hydrogen production. There are currently only twenty-seven operating commercial CCUS facilities worldwide, twelve of which are in the United States. Unless and until it becomes so or is required by law, it will not achieve widespread deployment. government support through tax policy, CCUS is not economically competitive today in most of its applications. ![]() The key barrier to CCUS filling these various roles and living up to its technical potential is high costs relative to current incentives: despite current U.S. 3 Additionally, CCUS could be used to decarbonize hard-to-electrify industrial processes 4 and to provide synthetic fuels for decarbonizing nonelectric energy uses. 1 Carbon capture, utilization, and storage (CCUS)-a suite of current and emerging technologies that remove carbon dioxide emissions (CO 2) from energy or industrial processes and then either sequester the carbon underground or use it for production of a variety of fuels or products 2-is very likely to be a key technology on most of the plausible paths for reaching this goal.Īmong various applications of the technology, CCUS in combination with natural gas powerplants can be used to provide firm baseload electricity or could serve as backup for intermittent renewable power in place of multi-day electricity storage. The Biden administration has set a goal of reaching net zero economy-wide greenhouse gas emissions by 2050.
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