Carbon Capture: Energy independence tool or climate's silver lining, and infographic of the week (IOTW)
Following last week’s newsletter about finding the silver linings in climate action in a post Trump era, it only felt right to follow up with a quick review of the state of play in carbon capture technologies.
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Fundamentally carbon capture utilization and storage (CCUS) as a solution offers a pathway to decarbonize hard-to-decarbonize industries such as cement, steel, and chemical manufacturing. By capturing CO2 at the point source, purifying it (through amine absorption as an example) and later utilizing it as a raw material in the manufacture of synthetic fuel or cement. Coal, natural gas, biomass, and renewables-based electricity can power this process of conversion.
As the U.S. transitions toward a cleaner energy future, the Energy Information Administration's (EIA) 2023 Annual Energy Outlook highlights significant trends shaping the power sector. While electrification, end-use efficiency, and the adoption of renewables are driving sustained reductions in power sector emissions, fossil-fueled generation is projected to decline through 2030 before stabilizing.
Fossil fuels will maintain a role in the U.S economy, fueled by growing global demand for products like chemicals, fuels, and fertilizers. This demand, combined with expectations for industrial growth, supports projections of continued natural gas and oil production in the U.S.
According to Mckinsey, CCUS capacities would have to grow over 100x to meet climate goals, globally, although the capacity of announcements have grown by over 10X.
With this as a backdrop, what can we expect? Here is my speculation:
Incentives likely to remain: Tax credits like Section 45Q, which incentivize CO₂ capture and storage, were signed into law during Trump’s previous term. He might continue or even expand these credits, as they align with his focus on job creation and technological innovation.
Shift away from green electricity? Federal funding for CCUS could increase at the expense of investments in wind, solar, and battery storage. That said, with the likelihood that tariffs on imported panels (most of which still continue to be made in China) and components for wind turbines may increase, perhaps the subsidies, at a lower value/threshold will continue.
Deregulation and streamlining of CCUS projects
Trump’s energy policy emphasized reducing regulatory burdens on industries. His administration might streamline permitting processes for CCUS projects to encourage private sector participation.
Eased environmental oversight: While this could accelerate CCUS project development, it might raise concerns about environmental safety and long-term CO₂ storage risks. I suspect we will see access to federal lands open up to developers, looking for storage sites.
More responsibility and power to the states: The federal government could defer more responsibility for CCUS initiatives to states and the private sector. While this may be helpful in some states, much like anything else, lack of consistencies in requirements and permitting/safety, may only create more confusion rather than provide clarity.
More grant funding for early-stage projects: In a world that overwhelmingly looks to invest venture funds into AI-based startups, seed grants offer life support to early-stage companies developing innovative solutions in carbon capture. We should expect to see accelerated deployment of seed grants to better understand critical infrastructure siting needs such as the ones from the Energy Policy Institute at Boise State University. The U.S. DoE has announced additional funding for projects that include all flavors such as coal-based and natural-gas based CCUS demonstrations.
Renewable energy developers expanding in to CCUS: While not a primary focus for all renewable energy developers, CCUS is increasingly seen as a complementary technology. Orsted, for example, is investing in carbon capture projects. Projects such as the Northern Lights where Equinor, Total, and Shell are equal partners, depict what the future could look like with similar efforts in the U.S.
Even as we discuss this topic additional investment is still needed and studies that need to completed to evaluate the need for pipeline infrastructure to transport the CO2 and potential implications on communities that will be impacted.
What are your thoughts on the topic?
Infographic of the week: US Carbon Capture activity and project map
Check out this interactive tool from the Clean Air Task Force to better understand the number of projects in development and/or operational in the United States, at the moment.
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With a history of greenwashing from the oil and gas sector, I have to be skeptical of claims the carbon capture will be available or scalable anytime soon. I'm open to arguments otherwise, but I haven't seen or read anything to convince me carbon capture will be viable in the next ten years.