Insights and Commentaries
2024 Americas Forum on CCS: Recap
Attendees Provide Insights on CCS Progress and Overcoming Hurdles
21st June 2024
On May 13th, the Global CCS Institute held its annual policy forum in Washington DC, drawing more than 250 attendees from diverse sectors within the CCS ecosystem. The event served as a platform for stakeholders to discuss CCS policies, advancements, challenges, and solutions. Among the attendees were representatives from US federal and state agencies, the Alberta government, NGOs, academia, labor groups, and entities engaged in CCS development, Direct Air Capture (DAC), financial services, and labor-related initiatives.
Jarad Daniels, the Institute’s CEO, opened the event by showcasing the rapid global growth of CCS and highlighting the policies and investments that have catalyzed CCS advancement in the US. As of March 2024, the US is home to 260 of the 564 CCS projects worldwide in various stages of development.
Mr. Daniels underscored the diverse applications of CCS across various industries and the importance of supportive policies, collaboration, and cooperation to achieve the gigaton-scale CCS deployment needed to meet current climate pledges and commitments.
Building upon Mr. Daniels' emphasis on the multifaceted applications of CCS and the pivotal role of collaboration, the forum discussions delved into a spectrum of vital topics for the advancement of CCS. Key themes included the status of current CCS projects, CCS-supportive policies in the US and Canada, infrastructure requirements, including pipelines and storage hubs, liability considerations, financing strategies, mechanisms for carbon credits and trading, and CCS co-benefits and the need for community engagement.
Developments in Policy and Projects
Chris Greig of Princeton University referenced the University’s Net-Zero America study that echoed Mr. Daniels on the critical importance of CCS for meeting climate targets. The study synthesized various Integrated Assessment Model (IAM) scenarios for limiting global warming to 1.5°C, revealing that over 90% of these scenarios require the capture of an average of 17 gigatons of CO2 via CCS by 2100. In the US, accomplishing this scale of CCS necessitates an annual capture rate of 0.7-1.7 gigatons across 1700 capturing facilities linked by 100,000 miles of pipelines.
Representatives from state governments and regulatory agencies, Natalie Lee of California, Julie Murphy of Colorado, Jessica Moore of West Virginia, and Holly Krutka of Wyoming described ongoing state-level CCS policy development. Policies such as California’s SB 905 and AB 1279, Colorado’s HB24-1346, and West Virginia’s HB 4491 and SB 162 will address pore space ownership, long term liability, and other important regulatory issues. These reflect the vital role of CCS in achieving emission-reduction goals by providing state-specific regulatory frameworks to reinforce federal incentives.
Among the US states represented at the forum, Wyoming is unique for having been granted primary enforcement authority (primacy) by the US Environmental Protection Agency (EPA), which allows the state to expedite CCS deployment by issuing permits for Class VI storage wells for CO2 injection. Wyoming is one of only three US states granted this authority. Holly Krutka, Executive Director of the Wyoming School of Energy Resources, discussed Wyoming’s robust CCS-friendly regulatory framework and supportive resources such as the Wyoming Integrated Test Center for technology evaluation, the Wyoming Pipeline Corridor Initiative, and comprehensive geologic mapping for CO2 storage. With two commercially operational CCS facilities, Wyoming is an early leader in project deployment. Dr. Krutka discussed the complementary effect of initiatives like California’s Low Carbon Fuel Standard (LCFS) and the EPA’s finalized power plant rule in advancing CCS deployment.
In Canada, both national and Alberta-specific incentives are available for CCS. Kate Rich, Assistant Deputy Minister of the Alberta Environment and Protected Areas, discussed Alberta’s Technology Innovation and Emissions Reduction (TIER) regulation, the Canadian government's commitment of C$7 billion to Carbon Contracts for Difference, and the Investment Tax Credit (ITC). These concerted efforts have propelled CCS development in Alberta with 24 proposed CCS hubs.
Kel Coulson of Carbon Engineering, a British Columbia-based company specializing in DAC, shed light on CCS policy distinctions between the US and Canada. Through the company’s partnership with US-based, 1PointFive, Kel Coulson notes that while Canada’s ITC applies to CAPEX expenses, the US 45Q tax credit for CCS can be applied to CAPEX and operational expenditure (OPEX) costs.
The US leads in providing federal-level CCS support and incentives. Harry Warren of the US Department of Energy (DOE) Loan Programs Office (LPO) outlined the office’s National Environmental Policy Act (NEPA) reviews and flexible financial support across three programs catering to various CCS projects that are typically either transportation- or emitter-driven. While Nth-of-a-kind projects (NOAKs) garner more investor confidence, LPO seeks to support first-of-a-kind projects (FOAKs) to advance CCS and attract future private investment.
Building on the value of innovative approaches to capturing carbon, Tom Dower of LanzaTech discussed the company’s proprietary processes for upcycling CO2 into marketable commodities at its six global locations, emphasizing the social and economic benefits of CO2 utilization.
Challenges
Jack Andreasen of Breakthrough Energy elaborated on social acceptance challenges for CO2 geo-storage, particularly in regions with complex industrial histories, compared with supportive regions like Wyoming and Alaska. To build community trust, he stressed the need for project developers to initiate dialogue through Community Benefits Plans and progress to Community Benefits Agreements.
Irfan Ali of DigiKerma echoed the importance of securing stakeholder buy-in. In addition to the challenge of public acceptance, the panelists pointed to the challenge of rising energy costs and inflation, which elevate CAPEX for both new and retrofitted facilities.
Matthew Young of Battelle, Matt Kittell of Societe Generale, and Vimal Chauhan of GE Vernova offered the investment perspective on revenue models for CCS projects. The speakers noted the cost-advantage of capturing high-concentration CO2 emissions and recommended projects seek diversified revenue streams beyond 45Q to increase financial viability.
Amid the diminishing impact of inflation on 45Q revenues and the resultant financial strain on CCS projects, Tom Dower of LanzaTech explained the imperative for indexing 45Q to inflation and advocated for equity in 45Q tax credits. Specifically, he advocated for the CCU Parity Act that would amend the 45Q code to match tax credit values for Carbon Capture and Utilization (CCU) with those offered for CCS and DAC.
For accurate accounting and support, Kel Coulson recommended delineating carbon credit sources into distinct categories, such as removals, reductions, and captures, and including DAC in the greenhouse gas (GHG) inventory, particularly given the additional challenge DAC operators face with access to clean energy sources.
Looking Ahead
The day's discussions gravitated toward solutions to project costs, social acceptance, and pipeline infrastructure. Speakers acknowledged the value of aligning state-level initiatives with the federal policy framework, like the Wyoming Pipeline Corridor Initiative and California’s SB 905, to improve regulatory clarity and consistency for project developers while bolstering public confidence in such projects.
On social acceptance of CCS, Jack Andreasen discussed the need for educating communities about air quality benefits, geo-storage safety, and pipeline safety measures. Mr. Andreasen recommended early and comprehensive engagement efforts that emphasize benefits for the wider community, including the labor force, schools, and community revenue.
Highlighting the co-benefits of CCS for communities, Angela Seligman of the Clean Air Task Force (CATF) presented the results of the 2023 CATF study on air-quality improvements from CO2 capture processes at emission sources. Capture technology requires purified CO2 streams, with upstream scrubbing of pollutants like particulate matter (PM), sulfur oxides (SOx), and nitrogen oxides (NOx). Results showed significant reductions, including over 90% in PM, over 500 tons per year in NOx, and over 99% in SOx. The study indicates that resulting health improvements, including locally reduced mortality rates and cost savings, outweigh the costs of construction or retrofitting for CCS sites.
Jessica Moore outlined West Virginia’s proactive community engagement strategies in collaboration with the Central Appalachian Partnership (CAPP), which provides communities with a two-way dialogue, presentations on the state’s energy history, current geologic understanding, and upcoming projects. Ms. Moore suggested meetings can be followed by a job fair to encourage workforce participation and highlight economic benefits. Ryan Sandmann of the Laborers’ International Union of North America (LIUNA) echoed the value of involving the local workforce and labor groups at the earliest stages.
Approaches to long-term liability for CO2 storage vary across US states and Alberta. State panelists from Colorado, Wyoming, and West Virginia discussed plans to review liability for individual projects every 5-10 years, whereas California's policies currently maintain project owner liability for 100 years. Kate Rich outlined Canada's approach to CO2 storage, featuring government ownership and liability over pore space with operator contributions toward stewardship funds.
Subnational regulations that enhance national safety requirements can bolster public confidence while expediting project permitting. Jessica Moore noted West Virginia's revisions to the underground injection control (UIC) rules for Class VI wells. Julie Murphy and Kate Rich each highlighted over 100 gigatons of storage potential in their respective regions. However, Chris Greig cautioned against potential overestimations of usable pore space.
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