Government CCS policy incentives: Federal tax credits and subsidies accelerate CCS adoption.
US government CCS policy incentives are the primary economic engine driving the current surge in the carbon capture and storage market. The core federal incentive is the 45Q tax credit, which provides a performance-based credit per ton of CO2 permanently stored or utilized. Recent policy updates have significantly enhanced this credit's value and accessibility, making a much wider range of projects economically viable, particularly those involving industrial capture and dedicated storage.
These incentives aim to de-risk projects for private investors by providing long-term revenue certainty. Beyond the tax credit, the government is also providing substantial direct funding for infrastructure development (e.g., CCO2 pipelines) and R&D grants to lower the cost of capture technology.
FAQs:
Q: What is the key federal tax mechanism that provides direct financial certainty for US CCS project developers?
A: The 45Q tax credit, offering a dollar amount per ton of captured and sequestered CO2.
Q: What is the primary function of the enhanced government financial incentives in relation to private investment?
A: To de-risk projects and provide a stable, long-term revenue stream to attract the necessary private capital for large-scale construction.
Q: Beyond tax credits, what other major form of government support is being provided to accelerate CCS deployment?
A: Significant direct federal funding and loan guarantees for CO2 transport and storage infrastructure, and R&D for capture technology.
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