Carbon Capture Utilization and Storage | FTI Consulting

Carbon Capture Utilization and Storage

Tax Strategies, Opportunities, Roadblocks, Hurdles, and Solutions

Energy, Power & Products (EPP) | Energy & Utilities

September 24, 2020

Power Plant

Carbon capture and storage projects are rapidly emerging as lucrative investment opportunities, due to a combination of federal and state tax credits and other incentives.

But for states, counties, utilities, and corporations seeking to meet carbon emission reduction goals — and for the investment community seeking to fund these projects — it can be difficult to understand and apply the various incentives that exist. A new report from the United States Energy Association (USEA) and the US Department of Energy (DOE), prepared by Orrick and FTI Consulting, offers insights into these complexities. Incentives for renewable energy technology are well-documented.

This report outlines tax and non-tax incentives for carbon capture, utilization, and sequestration (CCUS)—another vital climate tool to help achieve carbon-neutral goals. The United States has become a global leader in CCUS, attributable to robust policy support, private sector engagement, and the availability of geological storage. Ten of the 21 large-scale CCUS projects operating across the globe are hosted by the United States, and here within the country there are more than 30 projects in development.

Beyond the comprehensive analysis of federal and state incentives, the report provides a candid assessment of roadblocks preventing more widespread investment in CCUS projects—including government and regulatory hurdles, market potential, technical improvements, and public perception — and their solutions. The authors also present three case studies that identify the value of the various incentive mechanisms that exist to help pioneering projects become viable.

In conjunction, authors and representatives from USEA and DOE, hosted a webinar on October 1 to discuss the report, as well as emerging opportunities — and hurdles — for investment in CCUS technology. To view the webinar, click here.

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