News came out on 9 February that the US Budget Bill passed by congress and signed by the President into law included “FUTURE Act”. This act contains an extension to the US tax credit for CCS and CCUS, known as 45Q.
The existing version of 45Q provided a tax credit of $10 per tonne of CO2 for anthropogenic CO2 going to enhanced oil recovery, and $20 per tonne if going to straight storage. This was very useful and assisted with the economics of CCUS and CCS projects, however the total national volume was capped and this cap was potentially being reached. The new Bill removes the cap and increases the value of the tax credit, with it rising to $30 and $50 per tonne respectively. There are several conditions, including that it is for new plant that commences construction before 2024, there is a 12 year time limit on the tax credits, and the CO2 is sent to “secure” storage, which will have to be demonstrated by appropriate regulation and monitoring strategies.
The Bill, which also contains support for nuclear power (45J), was supported across the political spectrum by both Republicans and Democrats.
It is hoped that this will stimulate the business case for more CCS and CCUS projects in the USA, including potentially a revisit of Kemper project’s economics.
The 45Q Bill amendment can be seen at: https://www.heitkamp.senate.gov/public/_cache/files/a2af9a24-ada4-4df4-a08d-12c2708e7c19/heitkamp.whitehouse-45q-ccus-act-final.pdf
There has been much commentary on this good news, some can be seen at :