Financial incentives are a proven means to bolster carbon dioxide capture, storage and use. Building a viable carbon capture, utilization, and storage (CCUS) industry will require the rapid development and deployment of physical infrastructure, means of transportation, and systems for manufacturing goods. As with the launch of any new industry (even those built on foundations of existing technology), policy guidance, financial incentives, and a long-term perspective are necessary. Dialogue must be coordinated among policy-makers, stakeholders in related industries, and any local constituencies liable to be impacted by installations in terms of both new job opportunities and the potential loss of jobs - in cases where existing local industries will have to transition. According to a study published by the Global CO2 Initiative, the revenue potential for CO2 utilization in the next few decades will depend heavily on policy guidance. In the US, an emerging industry has been built via a tax credit for carbon storage made available more than a decade ago. It gained a further boost (as did the broader CCUS industry) with the Inflation Reduction Act of 2022 - which allocated nearly $370 billion for climate and energy programs. This included significant support to establish infrastructure for CO2 capture, transport, storage, and utilization. The CCUS industry will also greatly benefit from the large-scale support provided by the US legislation to hydrogen production and zero-carbon electricity - the impacts of which are already being felt in terms of industrial activity, technology development, and financing. The proposed “Fit for 55” plan in the European Union could have a similar impact directionally, though with less focus on CCUS. While the overall need for, and benefits of, CCUS are broadly understood and increasingly accepted, implementation decisions must take local considerations into account. Regulatory barriers, multiple permitting entities, the need to work effectively across borders, and a lack of constituent support can be hurdles delay implementation - and must be addressed. A just and speedy implementation of a CCUS industry requires it to be carefully guided through rigorous processes of certification, and of determining and measuring environmental impact in an objective, transparent, and consistent manner that gains approval while maintaining accountability. Meanwhile the introduction of CO2-based products to markets can be greatly facilitated by taking public- and private-sector procurement preferences into account, including those for certified “green” products.
Policy and Finance for Capture
CO2 Capture, Utilization, and Storage