Foley & Lardner LLP served because the summit sponsor at Infocast’s CCS/Decarbonization Venture Growth, Finance and Funding Summit which was held in Houston on July 25 and 26. Eric Blumrosen had the pleasure of serving because the summit’s co-chair. He was impressed with not solely the information and perception of the assorted presenters and panelists, however from the abundance of vitality and enthusiasm from this group in what’s for all sensible functions, the founding of a nascent trade.
Fellow companion Sarah Slack co-chaired the summit with Eric, whereas further Foley attorneys introduced on Qualifying Starting of Building Part 45Q Tax Credit (Victoria Roessler) and moderated a panel dialogue on Decarbonizing Industrials (Tim Spear). Accomplice Kyle Hayes participated within the Infocast RNG + SAF Capital Markets convention, presenting on the Standing and Outlook for RNG Manufacturing and Markets.
Earlier than sharing a number of takeaways from the summit, what’s CCUS? It’s basically an array of applied sciences aimed toward mitigating local weather change by capturing carbon dioxide (CO2) emissions from industrial processes and energy vegetation, using CO2 for varied purposes, and storing it safely underground. In response to quite a lot of consultants, CCUS applied sciences will play an important position in limiting world warming to 1.5 levels Celsius above pre-industrial ranges. Furthermore, CCUS can also be important in enabling the sustainable use of fossil fuels through the transition to a low-carbon economic system. The worldwide vitality trade is one that’s predominantly primarily based on fossil fuels and the necessity for vitality is simply rising. CCUS is a crucial expertise that permits us to satisfy our vitality calls for whereas concurrently reducing our carbon footprint. The Worldwide Vitality Company (IEA) estimates that with out CCUS, the price of assembly local weather objectives would improve by roughly 70%.
Whereas the first advantage of CCUS lies in its potential to considerably scale back greenhouse gasoline emissions, one other benefit of CCUS is its potential to advertise financial progress. Implementing CCUS applied sciences can create job alternatives and stimulate funding in analysis and growth. As well as, CCUS can supply income streams by enhanced oil restoration tasks, the place CO2 is injected into oil reservoirs to spice up oil manufacturing, and thru different industrial makes use of.
However the advantages, CCUS faces important challenges that hinder its broader adoption. At present, the most important impediment is the allowing course of for CCUS sequestration tasks, which is lengthy, expensive and unsure. Establishing a predictable regulatory framework for CCUS amenities includes complicated authorized and environmental issues, which can range throughout completely different jurisdictions. Streamlining and expediting the allowing course of are important to encourage extra funding in CCUS tasks.
Financing is one other main problem. Constructing and working CCUS amenities require substantial upfront investments, and the monetary viability of those tasks can rely considerably on the provision of incentives and assist, notably with sequestration tasks. Governments’ insurance policies, together with tax credit and different monetary incentives, play a vital position in attracting non-public funding in CCUS applied sciences.
With respect to tax credit, they’ve been an necessary driver for encouraging CCUS deployment. Within the U.S., the 45Q tax credit score incentivizes carbon seize tasks, providing a monetary incentive for every ton of CO2 captured and securely saved or used for enhanced oil restoration or different purposes. Nonetheless, the steadiness and longevity of such tax credit are important to supply certainty to buyers and guarantee long-term dedication to CCUS tasks which can final properly past the tax credit score scheme presently in place.
Regardless of the challenges, CCUS stays a vital instrument within the battle in opposition to local weather change. To beat limitations and foster its broader implementation, collaboration amongst governments, industries, and different stakeholders is important. Investing in analysis and growth, selling coverage consistency, and supporting technological developments are key components in unlocking the complete potential of CCUS and advancing towards a sustainable, low-carbon future.