The federal government released its first official analysis of the Inflation Reduction Act on Thursday, projecting that the new law will help the United States slash emissions roughly 40 percent below 2005 levels over the next eight years. It’s at least the fourth analysis to come to such a conclusion, which many experts say is a good sign those estimates could be more accurate than not.
The legislation, which dedicates roughly $370 billion to addressing climate change and was signed into law by President Joe Biden earlier this week, marks the most substantial federal investment into reducing the nation’s greenhouse gas emissions. That money will be used for tax credits, rebates and other financial incentives to rapidly boost the nation’s development and adoption of clean energy, electric vehicles and other strategies to address global warming.
But major questions remain over the models’ calculations, particularly when it comes to their assumptions about the outsized role carbon capture and storage technologies—or CCS—will play in the coming years. At least two of those models attribute between 10 and 20 percent of the additional emissions reductions they project through 2030 to the rapid scaling up and implementation of those technologies, according to a review of models’ data by Inside Climate News.
In other words, at least 100 million metric tons—and potentially as much as 200 million metric tons—of carbon dioxide are expected to be removed from the operations of power plants and industrial facilities by the end of the decade, according to two separate analyses conducted by Princeton University and the think tank Rhodium Group. The Princeton analysis predicts 20 percent of the nation’s emissions reductions through 2030 will come from carbon capture technologies. Rhodium attributes about 10 percent to those efforts. The new federal analysis doesn’t publicly break down its calculations, but alludes to some of its projections coming from carbon capture and removal technologies.
“We cannot overemphasize the transformative effect that the Inflation Reduction Act will have on the deployment of carbon capture technologies,” Matt Bright, carbon capture policy manager at the Clean Air Task Force, an environmental group that’s supportive of the technology, said in a statement.
Given that the technologies are widely criticized for being inefficient, expensive and especially difficult to scale, however, the emissions reductions attributed to CCS could signify a notable flaw in the models’ projections and undercut the accuracy of their findings. Some critics also worry implementing the technologies could cost far more than the few billion dollars the federal government estimates it will spend on them through 2031.
Attempts to scale up and prove the viability of carbon capture and storage technologies have so far proven problematic at best. CCS aims to capture CO2 emitted by power plants and other industrial facilities before it reaches the atmosphere and then store those emissions underground.
Both the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, passed last year, put a substantial amount of federal dollars into the development of those technologies, which have gained broad political support in recent years. But the technologies remain highly controversial among environmental activists, some of whom say they’re a waste of time and money that could go toward more proven climate solutions, such as renewable energy. They also argue that technologies like CCS incentivize fossil fuel companies to continue producing and refining their planet-warming products, with the promise of capturing the emissions later, rather than more quickly transitioning to cleaner energy sources.
It’s a point that Charles Harvey and Kurt House, who helped establish one of the nation’s first privately-funded CCS companies in 2008, reiterated in an opinion essay published in the New York Times on Tuesday, shortly after President Biden signed the Inflation Reduction Act into law.
Any public investment in those technologies is “a counterproductive waste of money,” the two wrote in the op-ed, pointing to more than a dozen CCS projects in the U.S. that aimed to scale up the technology and prove its financial viability but eventually failed due to prohibitive costs—despite receiving billions of dollars in federal subsidies.
Those projects include the Kemper Power Project in Mississippi, which spent $7.5 billion to build and equip a coal plant with CCS technology before shutting down in 2017, the FutureGen project in Illinois, which spent $1.65 billion on a similar coal plant project and shut down in 2015, and the Clean Energy CCS project in Texas and Hydrogen Energy CCS project in California, which together allocated over $500 million in funding before they both shut down in 2016.
Even the Petra Nova project, which was “the only recent commercial-scale power project to inject carbon dioxide underground in the United States,” Harvey and House said, “shut down in 2020 despite hundreds of millions of dollars in tax credits.”
“The list goes on,” they added, “with at least 15 projects burning billions of dollars of public money without sequestering any meaningful amount of carbon dioxide.”
The article was one of the most scathing critiques of the technologies to date, coming from an industry insider and a civil engineer, both of whom spent at least six years studying and attempting to implement CCS through their own private energy company, C12 Energy, before it too went out of business in 2015.
Many analysts say that the federal investments from the spending bill could be enough to make CCS operations profitable, and policy experts have said that some level of carbon capture is needed to cut emissions from manufacturing cement and steel and other high-carbon industries, said Nicholas Kusnetz, who covers the oil and gas industry for Inside Climate News and has been closely tracking the burgeoning technologies. Taken together, Kusnetz said, it’s likely that some carbon capture projects that might not have moved forward without the expanded tax credits will now get the green light.
It’s important to note that the tax credit that was expanded by the new climate bill will be available only to operations that are actually capturing and storing carbon dioxide. So unlike with the efforts cited by Harvey and House, projects will only be eligible to receive taxpayer money if they’re successful.
Still, even with the boost from federal funding, Kusnetz added, big challenges remain for companies hoping to successfully pursue carbon capture and storage this decade. That includes securing rights to the land where companies hope to store the carbon, obtaining permits to build pipelines that will transport the carbon, as well as inject it underground—and handling all of that while navigating new regulations and a skeptical public.
Ultimately, Kusnetz told me, nobody knows what is going to happen, or the degree to which carbon capture and removal might finally take off. “There are still real hurdles to deploying the technology,” he said. “Pretty much every carbon capture project so far has either struggled to meet the goals the companies set for them, or has just failed to get built.”
That’s it this week for Today’s Climate. Thanks for reading, and I’ll be back in your inbox on Tuesday.
Nicholas Kusnetz contributed to this report.
That’s how much just one pipeline project, which would transport carbon dioxide captured by ethanol production plants across six states and inject it underground, u003ca href=u0022https://www.reuters.com/markets/commodities/ethanol-could-get-boost-carbon-capture-credits-biden-climate-law-2022-08-18/u0022u003ecould receive in federal tax creditsu003c/au003e under the Inflation Reduction Act, highlighting how much the ethanol industry stands to gain from the new law.
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