Many of the provisions in the $369 billion Inflation Reduction Act that’s kicking around in the Senate involve supporting industries that actually exist, such as tax credits for renewable-energy programs that already power major cities and rebates for electric vehicles already on the road. But one important policy is designed for an industry that hasn’t yet come to pass: The bill includes a big boost for nascent carbon-capture programs by overhauling a tax credit known as 45Q, in some cases tripling the reward for companies to remove a ton of carbon dioxide from the atmosphere.
The goal of carbon capture is straightforward: to suck out CO2 from an industrial source or directly from the air and either store it underground or convert it to a solid form. So far, the technology has been too expensive to scale, costing as much as $600 per ton of carbon. With over 36.3 billion tons emitted worldwide in 2021, that price will have to come down substantially for the industry to scale up enough to make a dent in future emissions reductions. Experts hope that incentives like this bill — which includes a $180 per ton credit for direct capture, up from $50 — could help launch commercial-scale carbon capture. To understand how the bill could impact the industry, I spoke with University of California, Irvine, chemist Jenny Y. Yang, who researches how to power carbon capture through electricity.
A 2020 study found that over 80 percent of projects attempting to run carbon capture at a commercial level have failed. What will it take to get to the point of success? Is failure just a part of aiming big?
The technologies that exist tend to be very expensive, which is not unexpected for a new technology. But they’re generally not very efficient. The biggest barrier so far is that there haven’t been incentives for it. The legislation provides those monetized incentives.
A program called 45Q first provided incentives for carbon capture, and the new bill goes beyond 45Q and provides bigger incentives and extends the deadline for infrastructure credits from 2025 to 2032, which is really important. It takes time for the technology to be deployed. By having a longer timeline, you can involve more of the new and up-and-coming infrastructure. So we’re still building a lot of fossil-fuel plants, and having the time to incorporate carbon capture would be more effective. Plus a lot of technology is still developing, so they’re not going to be able to deploy it in such a short time frame.
Could you explain the electrochemical carbon capture you research?
It’s a good example of a technology in its early stages. Much of the carbon capture that has been worked on thus far has used thermal energy. When you couple that to a fossil-fuel plant, it sort of makes sense because there’s waste heat that you can recover to fuel the process.
But if we want to think about direct air capture or capture from point sources like cement manufacturing that don’t have a residual heat source to drive the process or make it less expensive, then it becomes very inefficient. What we do is use electrochemistry, or electrochemical potential — maybe electricity is the easiest word for it — to drive CO2 capture and concentration. This is relatively new, but it has the potential to be significantly more efficient and cheaper in the sense that it doesn’t require heat. And as renewable energy becomes cheaper, it will also become cheaper. It has a much higher ceiling in terms of cost and overall efficiency, but it’s also in its infancy compared with traditional methods that have pilot plants, for example.
We need that investment. What we have now is not very good, I think it’s fair to say. We need to invest before we can get to the point where we can put these things up everywhere.
Will this bill impact research like yours?
We tend to do more fundamental research, so it will in the sense that it will incentivize investment in technology that has the potential to be cheaper, because that creates a price for captured carbon and that gives us a goal for efficiency and overall process costs. What is actually quite impactful is that DOE announced last year that it has a Carbon Negative Shot initiative, and that sets a price point for captured carbon by 2030. That’s also very effective because that money or that initiative, to my understanding, is distributed across fundamental science to deployment to pilot plants — all the divisions will be able to apply for this money.
That’s really important because I don’t know if we’ve all done the best fundamental science first. But we also don’t want to wait. We maybe don’t have the best possible thing, and we should just apply what we have, but then if we have the potential in ten years to make something much better, we should also invest in that.
The largest credit is $180 per metric ton of carbon for direct air capture. Why are lawmakers giving that technology the largest incentive?
A lot of the industrial capture we would consider carbon neutral because you’re using a carbon source, just not emitting it, but direct air capture is ultimately what we will need to do once we defossilize everything else. That will make it carbon negative, which can help reduce the worst effects of climate change.
People get very excited about direct air capture. But if we have the energy to do that, we should defossilize, decarbonize first. When our infrastructure has stopped emitting carbon, we can think about direct air capture.
What has the U.S. done prior to this bill in promoting carbon capture?
Given the way things were before 45Q, it’s an improvement. It’s not perfect, but taking these steps forward is really important. Before 45Q, there was no incentive.
It’s hard, but think of how much investment we put in our current industries. What we’ve invested in carbon capture pales in comparison. We just haven’t tried hard, and part of it is that without a carbon tax, carbon credit, or any of these incentives, you wouldn’t do it. You wouldn’t make money. If it’s free to put CO2 in the air, why not continue doing what we’re doing?
That lack of federal funding is fascinating. We’re already banking on this technology to help us reach emissions goals, yet we haven’t actually started putting serious money into it.
It’s techno-optimism: Someone will figure it out somehow, and we’ll be saved. I worry about that, working on direct air capture. Although I do think it’s an important technology in 20 years after we decarbonize, it’s not going to save us. It will cost energy and money to do it. And we need to think about not emitting in the first place, how we can ramp down our CO2 emissions. I really like the investments in reducing emissions in this bill.
Do you think this bill could be a game changer for carbon capture? I’m thinking of how the Solar Investment Tax Credit caused massive growth in that industry when it was introduced almost two decades ago. I haven’t seen anything of this size, and the fact that it came out of the blue — even though it’s not what they originally wanted — it’s still a significant investment. I think it could be a game changer. Not to be pessimistic, but we were kind of doing nothing, right? We were doing very little. We had 45Q. Game changer might be too strong a term, but it’s definitely going to make a huge difference. The potential for electrochemical capture is very high. You can approach significantly higher efficiencies, you can work at small scales, you don’t need heat, and with the price of renewables falling, you can use excess renewable energy to operate it or just put a solar panel on it. The caveat, of course, is that, unlike with other technologies, there’s no plan to show that it actually works at scale. But the potential is significant.
This conversation has been edited for length and clarity.