What’s the issue?
Both the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) contain incentives designed to spur the use of carbon capture and storage.
Why does it matter?
However, as with hydrogen, many environmental purists view carbon capture and storage as a distraction, at best, from the need to simply decarbonize everything, and a dangerous subterfuge for promoting fossil fuels, at worst. However, more pragmatic promoters of a net-zero economy view it as a key component of the future state because it would allow for decarbonizing difficult industries like concrete and steel and facilitate the use of direct air capture, which many believe will be necessary to actually reduce the amount of carbon in the environment.
What’s our view?
The problem is that carbon capture and storage is essentially a permanent disposal method for a waste product and doesn’t generate revenue on its own. But the combined incentives contained in the two recent laws passed by Congress may just be enough to spur the development of projects and allow them to become economically viable. However, much needs to be sorted out as the incentives include both direct funding from the Department of Energy and tax incentives which only work if a project is actually completed. Also, without a carbon tax, the momentum generated by these incentives may not create a sustainable industry.
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