Carbon capture pipelines will benefit from federal climate legislation
The three carbon capture pipeline projects proposed to run through Iowa stand to benefit from a recently passed piece of federal legislation.
A part of the Inflation Reduction Act, signed into law by President Joe Biden this week, will increase the tax credits for companies that choose to pipe their carbon underground. It raises the government subsidies for each metric ton of carbon stored underground from 50 dollars to 85 dollars – incentivizing ethanol plants to participate in carbon capture technology.
This will profit the companies – Summit Carbon Solutions, Navigator CO2 Ventures and Archer Daniels Midland – that are attempting to build pipelines that will capture carbon emissions, liquify them and transport them to be stored underground in nearby states.
Vice president of public affairs Elizabeth Burns-Thompson at Navigator CO2 said the legislation could help pique the interest of more industries, beyond ethanol, to engage with their project.
“This new legislation potentially brings additional manufacturers to the table to look at how they can incorporate into the platform as well,” Burns-Thompson said.
Summit Carbon Solutions said in a statement that the move exemplifies carbon capture and sequestration pipelines' role in achieving significant greenhouse gas reductions.
Combined, the projects are expected to be able to capture up to 39 million metric tons of carbon annually, equating to around $3.3 billion in potential subsidies a year.
The legislation will be a game-changer in expanding the financial viability of carbon capture projects as a whole. John Thompson, technology and markets director of the Clean Air Task Force, an international non-profit devoted to decarbonization, said it will make carbon capture an option for industries that once found it too costly.
“What the Inflation Reduction Act does is it makes carbon capture feasible on hundreds of plants around the nation. A lot of those are going to be ethanol plants,” Thompson said. “But increasingly, more and more of them will be in what we call hard to decarbonize or hard to abate sectors: steel, cement, power refineries, petrochemicals, pulp and paper.”
"It makes carbon capture feasible on hundreds of plants around the nation."John Thompson, technology and markets director of the Clean Air Task Force
Thompson said the legislation is a victory for climate change. He supports the construction of the carbon capture pipelines in Iowa – estimating the companies’ combined efforts would reduce Iowa's industrial emissions by around 40 percent.
He said the projects could nearly double the amount of carbon being captured nationally.
“That's why these projects are nationally significant, and why they're so important in the fight against global warming,” he said.
Iowa environmentalists push back
But, not all think the legislation is worthy of celebration. State environmental organizations see the increased tax incentives as a step back in addressing the nation’s climate crisis. They argue it’s using public money to increase the profits of polluting industries.
“That's just more taxpayer dollars that are going to these private companies that are going to make billions of dollars in private profits,” said Jess Mazour, conservation program coordinator for Iowa’s Sierra Club chapter. “We know there are better ways to spend our taxpayer dollars on projects like wind and solar that are proven to work and do much less damage than carbon pipelines.”
Environmentalists across the state have been outspoken in their criticism of carbon capture pipelines. They decry the technology as a false climate solution and fear it could be used in enhanced oil recovery – a process that involves pumping carbon underground in order to extract more oil from it.
"That's just more taxpayer dollars that are going to these private companies that are going to make billions of dollars in private profits."Jess Mazour, Iowa chapter of the Sierra Club
Under the IRA, enhanced oil recovery efforts are also getting an incentive boost. Companies can earn up to $60, up from $35, on each carbon metric ton that is used for oil recovery or other manufacturing processes.
Environmental lawyer Carolyn Raffensperger said this legislation only empowers the fossil fuel industry.
“It is a bad economic deal for farmers, landowners, and it is certainly a bad economic deal for the public,” said Raffensperger, of the Science and Environmental Health Network.
Organizer Emma Schmit of the Iowa Food and Water Watch said the legislation has strengthened the resolve of the pipeline’s opposition – which has united landowners and environmentalists alike.
“I have not met an Iowan that's invested in this fight that isn't just absolutely miffed over this deal,” Schmit said. “They feel like they're being ignored by their leaders and elected officials, while these companies are kind of being handed the golden goose.”