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45q tax credit
100+ Groups Urge Congress to Abandon 'Carbon Utilization Fantasy'
"Promoting the utilization of captured CO2 in petrochemicals, plastics, and fuels, as your legislation would encourage, will perpetuate environmental justice harms and subsidize the oil and gas industry to do it."
Mar 06, 2023
More than 100 organizations on Monday urged the congressional sponsors of a new proposal that would boost the tax credit for certain carbon capture projects to shift their focus to solutions that will actually address the fossil fuel-driven climate emergency.
The groups—including 350.org, Beyond Plastics, Center for Biological Diversity, Food & Water Watch, Indigenous Environmental Network, Michigan Environmental Justice Coalition (MEJC) Action!, Physicians for Social Responsibility, Science and Environmental Health Network (SEHN), and Waterspirit—oppose the Captured Carbon Utilization Parity Act (S. 542/H.R. 1262).
Introduced last week by Sens. Sheldon Whitehouse (D-R.I.) and Bill Cassidy (R-La.) and Reps. David Schweikert (R-Ariz.) and Terri Sewell (D-Ala.), the legislation would increase the 45Q tax credit for carbon capture and utilization (CCU) "to match the incentives for carbon capture and storage (CCS) for both direct air capture (DAC) and the power and industrial sectors."
The groups sent a letter to the four sponsors arguing that:
This bill does not advance climate solutions, but is rather a giveaway to fossil fuel companies and other corporate polluters under the guise of climate action. Promoting the utilization of captured CO2 in petrochemicals, plastics, and fuels, as your legislation would encourage, will perpetuate environmental justice harms and subsidize the oil and gas industry to do it. Rather than perpetuating these climate scams, we encourage you to support the elimination of subsidies for the fossil fuel industry instead of enriching them through carbon capture schemes.
In addition to stressing that such projects consume a lot of water while producing emissions and chemical waste—further endangering frontline communities that are disproportuantely home to people of color and low-income individuals—the organizations pointed out that "carbon capture has a long history of overpromising and under-delivering."
"The overwhelming majority of captured carbon to date has been used to increase oil production via enhanced oil recovery (EOR)," the letter highlights. "The myth of a massive carbon management paradigm that uses and re-uses carbon dioxide on any large scale serves only to greenwash the reality of how carbon dioxide is used: for oil production."
"As laid bare in an investigation from the U.S. Treasury Inspector General for Tax Administration, the 45Q tax credit is rife with abuse as credits are improperly claimed," the letter further notes. "Moreover, documents uncovered by the House Oversight Committee's investigation into major oil companies and climate disinformation revealed that the biggest proponents of CCS also understand the technology to be costly, ineffective, and requiring continued and increasing government subsidization."
"The myth of a massive carbon management paradigm that uses and re-uses carbon dioxide on any large scale serves only to greenwash the reality of how carbon dioxide is used: for oil production."
Citing a report from the United Nations' Intergovernmental Panel on Climate Change, the organizations also explained that "in contrast to things like solar power and batteries, carbon capture is not the kind of technology that gets significantly cheaper over time, and increasing public subsidies to spark a carbon management industry will not result in a self-sustaining system."
According to dozens of groups representing communities across the country, "The carbon utilization fantasy should be abandoned, with focus restored on the solutions we know will help combat the climate crisis, like renewable energy and storage, electrification, energy efficiency, real zero-waste materials systems, agroecology, and more."
SEHN executive director Carolyn Raffensperger told Common Dreams that her group is supporting the letter "because carbon capture use and sequestration (CCUS) is the fossil fuel industry's diabolical plan to line its investors' pockets with public money" and "the antithesis of a climate solution in that it delays real, tried and true solutions."
"Further, the entire 45Q tax credit program turns sound environmental policy on its head: Instead of requiring the polluter to pay for its damage, 45Q tax credits pay the polluter to pollute," Raffensperger added. Pointing to proposed CO2 pipelines in Iowa, she said:
Keenly aware of the climate crisis, we investigated the claims that industry was making that we could address climate by putting a big machine on top of various polluting facilities and transporting the CO2 across the countryside and burying it deep underground. What we discovered was that the entire enterprise would require more energy than the original facility required. It will disrupt farm land and pose grave risks in case of a pipeline rupture. Even worse, we found that this vast complex system of carbon capture, transportation, and either use or disposal is horribly under-regulated by [the Environmental Protection Agency], the Pipeline and Hazardous Materials Safety Administration, the [Internal Revenue Service], and others. The frosting on this toxic cake is that the public pays the fossil fuel industry with public money and the public gets no climate benefit. If anything, CCUS makes climate change worse.
"Heed the lessons of the recent train derailment and pipeline disasters. That is, fix the regulatory mess before pouring money into 45Q tax credits," she urged U.S. lawmakers. "The tax credits are like shoveling coal into the boiler of a runaway train."
MEJC Action! backed the letter "because of the dangers CCUS presents to environmental justice communities in Michigan," Juan Jhong-Chung, the group's climate justice director, told Common Dreams. "Our communities are already overburdened by polluted air and water because of fossil fuel power plants and other toxic industrial infrastructure. We do not want government subsidies going to technologies that will perpetuate harms and impact the health of our families."
"Most projects where CCUS can be deployed are Black, Brown, and poor communities," the campaigner added. "We don't need more respiratory issues, we deserve clean pollution-free renewable energy."
As Rachel Dawn Davis, public policy and justice organizer at Waterspirit, said Monday in an email to Common Dreams, independent science has already shown that investments in carbon capture "would be a waste of money and time," and "we are experiencing the sixth mass extinction; we have no time to continue wasting."
"If we are to provide a livable future for current and future generations of young people and all creation, we must invest solely in renewable energy, not furthering fossil fuel fallacies," she emphasized. "Subsidies going to the most heinous polluters are only continuing through this legislation; congressional representatives must know better by now."
This post has been updated with comment from MEJC Action!.
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'Stop Wasting Public Money': Climate Groups Slam Carbon Capture Scam
"Rather than expand subsidies for false fixes," said one critic of a new bipartisan bill, Congress should pass legislation to "phase out all fossil fuel subsidies."
Mar 02, 2023
Climate organizations this week are calling out new legislation that would pour even more money into the "false solution" of carbon capture technology, which they warn is just a distraction by the fossil fuel industry that does nothing to address the climate crisis.
Advocates of bold climate action are taking aim at the Captured Carbon Utilization Parity Act (S. 542/H.R. 1262), introduced by Sens. Sheldon Whitehouse (D-R.I.) and Bill Cassidy (R-La.) and Reps. David Schweikert (R-Ariz.) and Terri Sewell (D-Ala.) on Tuesday.
As a summary from the senators details, the bill would boost the 45Q tax credit for carbon capture and utilization (CCU) "to match the incentives for carbon capture and storage (CCS) for both direct air capture (DAC) and the power and industrial sectors."
Specifically, it would increase the value for DAC utilization to $180 per metric ton and for power and industrial sector utilization to $85 per metric ton—a move that the Joint Committee on Taxation estimates would cost $16 million over the next decade.
A White House Council on Environmental Quality report from 2021 explains that utilization "refers to the potential for using captured CO2 to make products, like concrete or plastics. CCU is a broad term used to describe the many different ways that captured CO2 can be used or 'recycled' to produce economically valuable products or services."
"We have real and proven solutions to address the climate crisis that don't harm communities already overburdened with pollution."
Many frontline communities and climate groups have long criticized efforts to develop and implement such operations—and the potential investment of public money into them—because of both local and global impacts, and instead demanded a swift and just transition to renewables.
"We have real and proven solutions to address the climate crisis that don't harm communities already overburdened with pollution," Friends of the Earth climate campaigner Sarah Lutz said Wednesday. "The Captured Carbon Utilization Parity Act will only undermine the needed transition away from fossil fuels."
"There is no legitimate reason to double down on subsidies for fossil fuel and petrochemical industry greenwashing scams," she continued. "Sen. Whitehouse should not work with Republicans to light taxpayer money on fire at the expense of our communities and climate."
Food & Water Watch similarly stressed that "it is time to stop wasting public money on bogus tech" while pointing out that tax credit just jumped from $50 per ton of sequestered CO2 to $85 per ton under the Inflation Reduction Act, a historic but flawed package that President Joe Biden signed last year.
"Carbon capture supporters like to talk about it as a climate fix, but the fact that it is backed by oil and gas giants tells you everything you need to know," said the group's policy director, Jim Walsh. "The fossil fuel industry has pulled off a remarkable trick by rebranding oil drilling as a form of pollution reduction."
Walsh warned that "this bill would steer more public money towards dirty energy and plastic production under the guise of reducing climate pollution, which would be better spent building genuinely clean energy sources rather than propping up the very industries that are destroying our planet."
"This is pro-polluter scam technology that serves the interests of fossil fuel companies, increases pollution in communities, and does nothing to help the climate."
"It's time for lawmakers to see the truth about carbon capture and sequestration: This is pro-polluter scam technology that serves the interests of fossil fuel companies, increases pollution in communities, and does nothing to help the climate," he said.
Collin Rees, United States program manager at Oil Change International, also piled on the CCU bill Wednesday.
"Carbon capture, utilization, and storage is a dangerous distraction from the urgent work needed to actually confront the climate crisis, including a rapid and equitable phase-out of fossil fuels," he said. "Giving more public money to prolong Big Oil’s political power and profits is the wrong approach and a poor use of public funds."
"Rather than expand subsidies for false fixes like carbon capture yet again, policymakers should support existing bills," Rees argued, pointing to a proposal from Reps. Ro Khanna (D-Calif.), Raúl Grijalva (D-Ariz.), and Mike Quigley (D-Ill.) "to end subsidies for enhanced oil recovery" as well as the End Polluter Welfare Act, introduced by Sen. Bernie Sanders (I-Vt.) and Rep. Ilhan Omar (D-Minn.) "to phase out all fossil fuel subsidies."
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