![]() “So we’re looking for projects that fundamentally get repaid during that time period.” These tax credits are anticipated to cost taxpayers $2.3 billion from 2020 through 2029. ![]() “It’s very hard to look beyond that,” Brownlie said. Michael Brownlie, division director at Australian investment firm Macquarie, said in the global carbon capture panel that it remains difficult for investors to prioritize projects with a payback period longer than 12 years. These tax credits have been a strong driver of the wave of new CO2 capture projects planned across the U.S. Once approved, the tax credits last for up to 12 years. The Inflation Reduction Act, passed in August 2022, increased that credit from $50 per metric ton to $85 per metric ton of CO2 captured from a specific point, such as an industry smokestack, and $150 per metric ton for CO2 captured directly from the air. Many of these projects hinge on a massive federal tax credits for carbon capture, an IRS program known as “45Q,” enacted in 2008 under the Bush Administration. … Now it feels almost like the pace has slowed down but the actual quality of projects of those projects and those announcements has gone up tremendously.” “It was hard to tease out what was a real project, what’s actually going to make it to commercial operation. “A year ago it seemed like every other day there was an announcement in the space, said Okwudiri Onyedum, treasurer at ExxonMobil’s low carbon solutions division, said in a panel discussion hosted by the Global Carbon Capture and Storage Institute. Another seven are under construction, with the remaining 158 projects still in an early planning phase. Of the 190 projects in the queue, only 21 are currently operating, with another three suspended or taken out of service. But it remains unclear how many of these projects will become a reality or how many of the projects that are built will actually work. The database only includes projects that can capture more than 100,000 tons of carbon dioxide per year from the smokestacks of industry (or 1,000 tons for direct air capture projects that suck CO2 out of ambient air). Data from the International Energy Agency show 190 large scale carbon capture, utilization, and storage projects in the U.S. These carbon capture projects include proposals to divert CO2 produced in biofuel plants, ammonia and hydrogen production centers, power plants, natural gas processing plants, cement kilns, and steel mills. Many supporters of carbon capture and storage see the technology as a path to lessen the climate impact of major industries and to offset the carbon dioxide (CO2) emissions from major companies whose shareholders are pushing them towards carbon neutrality. The world’s largest energy financiers – including oil and gas majors like ExxonMobil and Chevron, the federal government and private equity firms – are investing billions of dollars in technology intended to reduce emissions of carbon dioxide, the most significant greenhouse gas contributing to a rapidly warming climate.
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