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The Section 45Q tax credit is a game-changing policy that has led to significant investments in CCUS technologies in recent years. The enhancements made to the tax credit in 2022 are sure to spur further investment and commercialization of these technologies. In order to ensure that these investments are realized, these enhancements must be effectively implemented.

Capturing carbon dioxide in only one part of the carbon, capture, utilization, and storage (CCUS) equation. Robust policy support is required to enable the entire CCUS ecosystem, including carbon dioxide transport and storage, in order to unlock the substantial environmental benefits that carbon capture can provide.

Policies must also ensure energy consumers continue to have access to secure, low-cost, and accessible — or dispatchable in the case of electricity generation — forms of energy, and be accompanied by a robust and complementary set of incentives to develop and deploy cost-effective CCUS technologies, a clear and harmonized set of requirements and incentives to facilitate pipeline transportation of captured carbon dioxide and the infrastructure needed to support carbon capture, transport and storage, and increased and continued support for carbon dioxide storage and the study of post carbon dioxide injection and monitoring in geologic formations.

Over 60% of global carbon dioxide emissions come from point sources that utilize fossil fuels — 40% of that is from the power sector. IEA projects electricity demand to nearly triple by 2070 – equivalent to adding the Chinese grid every eight years – driven by economic growth, electrification and increased access to electricity in developing economies. One of the defining challenges to achieve stabilization is to reduce carbon dioxide emissions from existing energy assets.