Portman, Bennet Introduce Bill to Help Finance Carbon Capture Projects, Reduce Emissions, and Boost Innovation
Bipartisan Legislation Would Support Domestic Energy Production, Create New Economic Opportunities, and Reduce Carbon Pollution
Washington, DC – U.S. Senators Rob Portman (R-OH) and Michael Bennet (D-CO) today introduced the Carbon Capture Improvement Act to make it easier for power plants and industrial facilities to finance the purchase and installation of carbon capture, utilization, and storage equipment, as well as direct air capture (DAC) projects through the use of private activity bonds (PABs).
Carbon capture removes carbon dioxide from an emissions stream at a power plant or industrial facility reducing emissions from energy-intensive industries. DAC is an innovative emerging technology that removes carbon dioxide directly from the atmosphere. These technologies allow us to reduce emissions and protect the environment while continuing to use our natural resources, but first generation facilities can cost upwards of $1 billion. By authorizing private activity bond financing, this bill will encourage commercial deployment, which is essential for bringing costs down and developing these technologies to scale.
“This bill is a win-win for jobs and the environment, and I’m proud to continue my work on this issue with Senator Bennet,” said Portman. “Carbon capture and direct air capture are common-sense technologies that will allow states like Ohio to continue to utilize our natural resources while protecting our environment at the same time. This bipartisan measure is supported by business groups, energy groups, and environmental groups alike, and I urge all of my colleagues to support it.”
“Reducing carbon pollution while creating good-paying jobs is something Democrats, Republicans, labor unions, industry, and environmentalists can all get behind,” said Bennet. “Our bipartisan legislation would help reduce carbon pollution by making it more cost effective to invest in carbon capture equipment. This is a significant step to ensure we are boosting Colorado's clean energy economy, rewarding innovation, and keeping our air clean while addressing the threat of climate change.”
The Carbon Capture Improvement Act would allow businesses to use PABs issued by local or state governments to finance a carbon capture project. These bonds are beneficial to consumers and businesses because they are tax-exempt and can be paid back over a longer period of time, and there’s already a variety of projects eligible to be financed using tax-exempt bonds such as airports, docks, and sewage facilities. Under this bill, if more than 65 percent of carbon dioxide emissions from a given facility are captured and injected underground, then 100 percent of the eligible equipment can be financed with PABs. If less than 65 percent is captured and sequestered, then tax-exempt financing is permitted on a pro-rated basis. PABs have been used for decades to finance pollution control equipment at U.S. power and industrial facilities; capturing carbon dioxide is a logical next step. The bill would also allow facilities to utilize the existing 45Q tax credit for carbon sequestration for industrial emissions.
The bill text is available here.
Statements in support of the Carbon Capture Improvement Act:
“This important legislation clears the way for broader use of carbon capture technology by easing access to capital to build the infrastructure that will bring more carbon capture projects to life. Workers and communities are depending on measures like these to help lower emissions and sustain local economies,” said James Slevin, President, Utility Workers Union of America.
“The Carbon Capture Coalition commends Senators Bennet and Portman for their leadership on the introduction of the Carbon Capture Improvement Act of 2021— bipartisan legislation that would authorize the use of tax-exempt private activity bonds (PABs) to help finance the purchase of carbon capture retrofit equipment for installation at power plants and industrial facilities, a key recommendation outlined in the Carbon Capture Coalition’s 2021 Federal Policy Blueprint,” said Madelyn Morrison, Coalition External Affairs Manager, Carbon Capture Coalition. “The Carbon Capture Improvement Act of 2021 is the latest piece of bipartisan legislation introduced this Congress that aims to bolster federal efforts to accelerate the economy wide deployment of carbon capture technologies and meet our collective midcentury climate goals.”
“Carbon capture is a critical weapon in the fight against climate change, but financing U.S. carbon capture projects is tough. Private Activity Bonds were used for decades to help finance traditional air pollution projects. Let's put them to work again — but this time for CO2, our most challenging global pollutant,” said Dan Reicher, Former U.S. Assistant Secretary of Energy and Founding Executive Director, Stanford University Steyer-Taylor Center for Energy Policy and Finance.
“The Carbon Capture Improvement Act is an important addition to the many carbon capture-supportive bills already introduced this Congress. Expanding the suite of financing mechanisms available to carbon capture and direct air capture will make additional private capital available on more favorable terms, supporting innovation and boosting future deployment and emissions reductions potential on the road to net-zero,” said Lee Beck, International Director, Clean Air Task Force.
“If we’re serious about expanding carbon removal and storage projects to address the climate crisis, we must make these technologies and strategies more affordable,” said Shannon Heyck-Williams, Director of Climate and Energy Policy, National Wildlife Federation. “We are grateful to Senator Bennet for introducing a bill to allow industrial sector carbon capture as well as direct air capture projects to qualify for private activity bonds, which were wildly successful in financing life-saving air pollution controls in the 1970s and ‘80s. We should learn from the past and implement this tactic without delay to ensure both people and wildlife alike are protected in the face of a changing climate.”
“The deployment at scale of carbon capture projects, as well as carbon removal technologies like direct air capture, will be decisive in meeting our long-term climate goals,” said Bob Perciasepe, President, Center for Climate and Energy Solutions. “We’re pleased to see this bill make smart use of private activity bonds, a proven approach for financing infrastructure projects and building long-term public-private partnerships. We commend Senators Bennet and Portman for their leadership on this important, bipartisan legislation.”
“To reach net zero emissions worldwide by 2050, we must act quickly and decisively. The Carbon Capture Improvement Act will support the finance and deployment of critical last-mile decarbonization technologies, like carbon capture and direct air capture. We must invest in these technologies now to address the most difficult emissions reductions and achieve our climate goals. The Nature Conservancy is pleased to see the bill’s introduction,” said Jason Albritton, Director of Climate and Energy Policy, The Nature Conservancy.
“Carbon capture, including direct air capture, will be critical in reducing emissions, yet existing financing structures are insufficient for deployment at scale. BPC Action applauds Sens. Bennet (D-CO) and Portman (R-OH) for introduction of the Carbon Capture Improvement Act, legislation that will expand eligibility for private activity bonds for financing carbon capture. We look forward to working with Congress to get this bill passed into law this year,” said Michele Stockwell, Executive Director, Bipartisan Policy Center Action.
“Deploying carbon capture technologies at scale is crucial for the cement industry to reach its net-zero by 2050 goal,” said Michael LeMonds, Vice President, LafargeHolcim. “Enacting this legislation will ensure we have access to the capital necessary to finance these investments. Carbon capture projects, like the one we are working on in Colorado, will help create a new generation of good-paying, manufacturing jobs, while helping us reduce our carbon footprint.”