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CCS IN THE AMERICAS | February 2023 Recap

This newsletter provides updates on policy and advocacy events important to the work of the Global CCS Institute in the Americas.


This month's newsletter highlights the Biden-Harris Administration’s continual  funding for -- and its policies addressing --  decarbonization research and development, as well as environmental justice. In addition, a new report  out of Canada  indicates that the country can remain competitive in attracting investment in low-carbon technologies, despite the United States enacting the Inflation Reduction Act last year. 

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Table of Contents

  1.  United States – Federal (Policy/Legislation/Regulation) 
    1.  Executive Branch
      1.  U.S. Treasury   
  2. United States – States (Policy/Legislation/Regulation)  
    1. Interactive Tracker for State Action on CCUS
    2. Louisiana
  3. Americas Institute Events
  4. Areas to Watch - U.S. 
  5. Areas to Watch - Canada 
  6. Other News
    1.  Canada 
    2.  Environmental Justice 
    3.  Foundations 
    4.  Reports
    5.  Research and Development 
    6.  Utilization

     

United States – Federal (Policy/Legislation/Regulation) 

EXECUTIVE BRANCH 

U.S. Treasury 

The U.S. Treasury Department, the U.S. Department of Energy, and the Internal Revenue Service (IRS) released information on key provisions of the Inflation Reduction Act to incentivize investment in underserved communities and hard-hit coal communities. The program incentivizes clean energy property manufacturing and recycling, industrial decarbonization, and critical materials processing, refining, and recycling. The notice provides a broad range of examples of projects eligible to apply for an investment tax credit of up to 30 percent, including the manufacturing of fuel cells and components for geothermal electricity and hydropower, equipment for carbon capture, and critical minerals processing facilities. The application process for the Qualifying Advanced Energy Project Credit program will begin on May 31, 2023.  

     

United States – States (Policy/Legislation/Regulation)

INTERACTIVE TRACKER FOR STATE ACTION ON CCUS 

Interactive Tracker Launched by Arnold & Porter and Columbia’s Sabin Center.  The Arnold & Porter law firm developed a new  CCUS Legislative Tracker, releasing it on the Carbon Dioxide Removal Law webpage of Columbia Law School’s Sabin Center for Climate Change Law.  The interactive tracker “Helps track legislative and significant state CCUS actions nationwide. Through January 2023, the tracker identified 15 states with significant CCUS legislation. In addition, eight states have enacted new legislation or amended existing CCUS frameworks since 2021."  At its initial publication, the Tracker focused on six types of state actions:

  1.  Statutory clarifications of pore space ownership
  2.  Mechanisms to combine ownership interests within a potential storage facility
  3.  Long-term state stewardship programs
  4.  Trust funds and associated fee mechanisms used to defray various costs incurred by the state
  5.  State assumption of UIC primary enforcement authority (known as primacy)
  6.  Inclusion of CCUS in published state climate action plans

 

LOUISIANA

Developers would benefit from broadening permitting of so-called Class VI carbon capture and sequestration (CCS) wells to states, Louisiana Governor John Bel Edwards said in a letter last month to EPA Administrator Michael Regan. The process has lacked clarity and a clear timeline, Edwards wrote. 


     

Americas Institute Events

February 21, 2023, “The Inflation Reduction Act and US CCS Projects and Development” (Author: Ruth Ivory-Moore, Institute Policy and Advocacy Manager, Americas)  was published in the Italian online magazine R'energia. 

 

February 22, 2023, Ruth Ivory-Moore co-moderated the “CO2-Specific Leak Detection and Emergency Response Protocol” panel at the Department of Energy’s Roadmap for CO2 Transport Fundamental Research Workshop in Columbus, OH.  The panel covered: Dispersion modeling and Potential Impact Radius  for CO2 / Odorant Additives R&D, sensors development and integrity considerations for CO2 pipelines, multi-modal monitoring, leak detection, low-temperature brittleness, and ductile propagation testing in CO2 depressurizing scenarios, and an overview of API’s Emergency Response Workgroup. 

     

Areas to Watch - United States

SECURITIES AND EXCHANGE COMMISSION

U.S. SEC chief weighs scaling back climate rule as lawsuits loom.  Securities and Exchange Commission (SEC) Chair Gary Gensler is considering scaling back a potentially groundbreaking climate-risk disclosure rule that has drawn intense opposition from corporate America.

 

CONGRESS

  • Capitol Hill’s permitting reform effort got new life in February as two top Senate, and House lawmakers held an initial summit on reviving the overhaul bid. This time, the House could take the lead.  Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) and House Natural Resources Chair Bruce Westerman (R-Ark.) discussed the path forward for the stalled permitting reform effort. 
  • Sens. Sheldon Whitehouse (D-R.I.) and Bill Cassidy (R-La.) introduced  the Carbon Capture and Utilization Parity Act  (CCU Parity Act or Act) on February 28th.  “ The bipartisan  CCU Parity Act would create parity between the credit value for utilization and sequestration in the 45Q carbon capture tax credit. The press release issued by Sen. Whitehouse’s office stated the CCU Parity Act would: 

    • Establish parity for utilization that will further incentivize the deployment and innovation of carbon capture technology and low/zero-carbon products.
    • Reduce current annual global CO2 emissions by up to 10 percent, including by addressing the industrial sector that accounts for 24 percent of U.S. greenhouse gas emissions. 
    • Promote a circular economy by keeping materials in circulation for as long as possible.

Representatives David Schweikert (R-AZ) and Terri Sewell (D-AL) also introduced the legislation in the House.


     

Areas to Watch - Canada

Greens want Canada to omit blue hydrogen from subsidies. A coalition of climate groups and academics asked Finance Minister Chrystia Freeland to exclude projects derived from fossil fuels from the Canadian government’s hydrogen production tax incentive. 

 

 Alberta’s Premier Danielle Smith sent Prime Minister Justin Trudeau  a  letter inviting the federal government to collaborate with Alberta on carbon capture utilization and storage. However, this collaboration is contingent upon halting the  introduction of just transition legislation  and oil and gas emissions cap.

     

Other News

This section is for other news that may directly or indirectly impact CCS deployment


CANADA

  • The Canadian NGO Clean Prosperity and  Transition Accelerator Research issued a  report entitled “New data shows what Canada can do to compete for low-carbon investment.” The report outlines policy measures that Canada  can deploy to remain competitive in response to the U.S. Inflation Reduction Act.  The working paper recommends  the federal government introduce new measures in Budget 2023 to improve Canada’s competitiveness as a destination for low-carbon investment, namely: 
    •  Carbon contracts for difference, a kind of insurance policy on the future value of carbon credits that will give firms the confidence to make big decarbonization investments. 
    • Strategic financial support for industries where Canada can compete globally and  generate significant economic benefits, good jobs, and manufacturing value added. 

  • The Pembina Institute issued a report stating that based on their analysis,  updates to the Technology Innovation and Emissions Reduction (TIER) regulation  – along with considerable federal policy incentives (the 50% Investment Tax Credit, Clean Fuel Regulation, Oil and Gas Emissions Cap, and forthcoming Carbon Contracts for Difference) – provide sufficient upfront and sustained support for companies in Alberta to now make progress on CCUS projects. According to their assessment, no further support from the federal or provincial government (such as changes to Alberta’s Oil Sands Royalty system) is needed to support crucial decarbonization projects. 


ENVIRONMENTAL JUSTICE 

  • Modernizing Regulatory Review.  On January 20, 2023, the White House issued a Memorandum for the Heads of the Executive Department and Agencies.  In consultation with representatives of executive departments and agencies, this memorandum directed the Director of OMB  to begin a process to produce recommendations  for improving and modernizing regulatory review.  These recommendations include procedures that  consider the distributional consequences of regulations, including as part of any quantitative or qualitative analysis of the costs and benefits of regulations, to ensure that regulatory initiatives appropriately benefit and do not inappropriately burden disadvantaged, vulnerable, or marginalized communities. 

  • EPA Announces $27 Billion Effort to Curb Emissions and Stem Environmental Injustices. The Biden Administration announced $27 billion in federal clean energy investment grants for the Greenhouse Gas Reduction Fund (GGRF or Fund).  The GGRF is part of the   Inflation Reduction Act, which aims to leverage private capital for clean energy investments nationwide, focusing  on disinvested communities. The fund consists of two competitive grant programs. One program is a $20 billion competition awarding  grants to eligible nonprofits that partner with community financial institutions such as green banks, community development financial institutions, and housing finance agencies. The EPA also announced launching a national community roundtable series to introduce the initiative nationwide and to get feedback on community-level solutions that the fund can support. The agency expects to open competition funding by the summer of 2023. 
  • Biden-Harris Administration Announces $550 Million to Advance Environmental Justice from the  Inflation Reduction Act to expedite investments through the U.S. Environmental Protection Agency’s (EPA) new Environmental Justice Thriving Communities Grantmaking (EJ TCGM) program. This unique, innovative program will fund up to 11 entities to serve as grantmakers to community-based projects that reduce pollution. Selected grantmakers will develop an efficient, simplified process so that organizations historically have faced barriers to receiving funding can more seamlessly apply for grants that address environmental harms and risks. The entities eligible to apply under this Request for Applications (RFA) and serve as an Environmental Justice Thriving Communities Grantmaker fall into four categories, including: 
    • A community-based nonprofit organization. 
    • A partnership of community-based nonprofit organizations;  
    • A partnership between a Tribal Nation and a community-based nonprofit organization; or 
    • A partnership between an institution of higher education and a community-based nonprofit organization.  
The deadline to apply is May 31, 2023. EPA expects these grantmakers to award subgrants to community-based organizations before 2024. 

FOUNDATION 

DOE’s First Ever Agency-Related Foundation Will Accelerate the Development of New Clean Energy Technologies, Help Communities Unlock the Benefits of a Clean Energy Future.  On February 9th, DOE released a Request for Information (RFI) seeking public and stakeholder input on the Department’s first-ever agency-related Foundation. Authorized by President Biden’s bipartisan CHIPS and Science Act of 2022, the Foundation for Energy Security and Innovation (FESI) will support DOE in carrying  out its critical mission to ensure America's continued security and prosperity through transformative science and technology solutions. This RFI seeks input on how DOE may engage with FESI and the communities it will serve and how stakeholders will engage with the foundation directly. To help identify and prioritize opportunities for DOE to engage and partner with FESI, DOE is seeking information from potential stakeholder groups including, but not limited to: 

  • Philanthropic and non-profit organizations 
  • Community stakeholders 
  • DOE’s National Laboratory foundations 
  • Potential investors in companies developing technologies aligned with the DOE mission
  • Industry stakeholders, especially those representing diverse regions, sectors, and communities
  • Other potential stakeholders or collaborators 

REPORT 
  • The Energy Future Initiatives (EFI) issued its report, Turning CCS projects in heavy industry & power into blue chip financial investments.  The study zeroed in on different risks that are holding back greater investments in CCS.  In addition, the study identified two fundamental challenges required to kick-start at-scale investment in CCS as a decarbonization solution; application heterogeneity and value chain complexity.  


RESEARCH AND DEVELOPMENT

  • DOE Invests More Than $130 Million to Lower Nation’s Carbon Pollution.  On 01/30/2023, DOE announced $131 million for 33 research and development projects to advance the wide-scale deployment of carbon management technologies to reduce CO2 pollution. The projects will address the technical challenges of capturing CO2 from power plants and industrial facilities or directly from the atmosphere and assess potential CO2 storage sites, increasing the number of sites progressing toward commercial operations.  


UTILIZATION 

  • Atmospheric CO2 captured in concrete for first time.  On February 3, 2023, two carbon removal startups and a major building company reported they have successfully pulled carbon dioxide from the air and "permanently stored" it in concrete for the first time. Heirloom Carbon, a direct air capture (DAC) company, conducted the demonstration project with Carbon Cure Technologies and Central Concrete, a subsidiary of Vulcan Materials Co. The three companies announced that they had sequestered around 80 pounds of CO2 as calcium carbonate in concrete — a first for the DAC industry. 



     
 
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