(Adds quote from Senator Wyden’s office)
By Jarrett Renshaw and Timothy Gardner
WASHINGTON, Oct 1 (Reuters) – The White House and top
Democratic lawmakers have agreed to boost a tax credit for
industrial carbon capture projects in a deal that could help
solidify support for the budget reconciliation bill at the heart
of President Joe Biden’s economic agenda, two sources with
knowledge of the matter said.
The agreement worked out by White House officials and
lawmakers, including Senators Ron Wyden and Sheldon Whitehouse
and some of their counterparts in the House, would raise the
so-called 45-Q tax credit for carbon capture projects in heavy
industry, such as cement and steel plants, to $85 per metric
ton, up from $50.
The White House and Senator Whitehouse did not immediately
respond to requests for comment. A spokesperson for Wyden said
conversations are ongoing.
The incentives, if passed, could help Biden with his climate
goals by getting more industrial plants to invest in heavy
equipment that siphons off carbon dioxide (CO2) emissions for
permanent storage underground, preventing the gas from reaching
the atmosphere.
The deal would also waive “capture rate” requirements that
say that plants must sock away a high percentage of carbon to be
eligible. That could allow more plants to begin to get some
credit for investing in initial carbon credit units.
Still, some environmentalists say the technique may never
enter wide commercial use as it is expensive to build, certify,
and operate. Many projects, such as Petra Nova in Texas, have
stopped operations in recent years.
U.S. Representative Cheri Bustos, a Democrat who has
sponsored carbon capture legislation, said the deal was welcome
news. Raising the credit “would drastically increase our carbon
capture capacity by 2035 and create tens of thousands of new
jobs,” including at ethanol and manufacturing plants in rural
states, Bustos said in a statement.
Current 45-Q tax credits allow polluting plants to claim $50
per ton of carbon dioxide they sequester and $35 a ton for
projects where carbon is captured and then used to push more
crude oil from aging oilfields.
The agreement does not yet cover the power sector, which
includes coal and natural gas plants, the source of about
one-third of U.S. CO2 emissions.
Senator Joe Manchin, a Democrat from large coal-producing
state West Virginia, has pushed Senate Majority Leader Chuck
Schumer to allow coal and natural gas burning power plants to
get incentives for carbon capture in the reconciliation bill.
Discussions are progressing on boosting the carbon capture
credit for power plants that could get Manchin on board, the
sources said. Manchin’s vote is key for passage of the
reconciliation bill in the Senate which is divided 50-50. He has
said that the original $3.5 trillion bill is far too costly.
Manchin’s office did not immediately respond to a request
for comment.
Biden and his fellow Democrats are hoping to pass the
reconciliation bill on a party line vote in both legislative
chambers along with a smaller bipartisan infrastructure bill.
(Reporting by Jarrett Renshaw and Timothy Gardner; Editing by
Chizu Nomiyama, Mark Porter and Marguerita Choy)
(([email protected]; +1 202 380-8348 (Twitter
@timogard); Reuters Messaging:
[email protected]))
Keywords: USA BIDEN/INFRASTRUCTURE CARBON (UPDATE 4, EXCLUSIVE, PIX)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
www.nasdaq.com