On December 21, Congress passed the Consolidated Appropriations Act, 2021, which includes omnibus spending legislation for FY 2021, COVID-19 relief, sweeping provisions that modernize Department of Energy (DOE) research and development programs, programs focused on climate policy, energy tax extenders, and several other important pieces of legislation.
Along with FY 2021 appropriations, the Consolidated Appropriations Act includes the following legislation that supports the development and deployment of carbon capture, utilization, and storage (CCUS) technologies:
- Reuathorization of and increased funding authorizations for DOE's Fossil Energy Research and Development program, which is responsible for CCUS research, development, and deployment;
- The USE IT Act, which provides for accelerated permitting processes for carbon dioxide pipelines, as well as increased funding authorizations for direct air capture (DAC) and carbon dioxide utilization RD&D, and;
- A two-year extension of the commence construction deadline under the Section 45Q tax credit program.
CURC Executive Director Shannon Angielski issued the following statement on the legislation:
“The Carbon Utilization Research Council (CURC) is pleased that the Omnibus Appropriations Act of 2021 includes legislation that represents the culmination of several years of bipartisan, bicameral momentum to advance policies that support carbon capture, utilization, and storage (CCUS) development and deployment. The omnibus includes the Energy Act of 2020, which contains provisions to reauthorize the Fossil Energy Research and Development Program at the Department of Energy that reflect the recommendations of the 2018 CURC-EPRI Advanced Fossil Energy Technology Roadmap. The Energy Act authorizes robust funding for CCUS research and development, commercial demonstration projects, large-scale pilot projects and the design studies necessary to deploy CCUS at scale. The bill also authorizes increased funding for large-scale carbon dioxide storage research programs and demonstration projects and includes reforms for carbon dioxide pipeline permitting, which are both critical as CO2 transport and storage will underpin the potential emissions benefits of the entire CCUS ecosystem.
The Energy Act represents a much-needed modernization of and investment in DOE’s RD&D programs, which had not been reauthorized since 2007. CURC looks forward to working with the 117th Congress to ensure that these programs are appropriated consistent with Energy Act authorization levels in the years ahead.
Members of CURC are also pleased that Congress elected to extend the commence construction window under the Section 45Q tax credit program by two years. This extension reflects an important recognition by Congress of the role that CCUS must play in carbon management. This will help to extend the runway for CCUS projects while we await final regulations to be issued by IRS. However, the impact of the pandemic on the economy will make it challenging for CCUS to compete in tax equity markets. That is why CURC members are encouraged by the introduction of bipartisan legislation in the House and Senate to enact a direct payment mechanism for the Section 45Q tax credit. Direct pay will ensure that projects receive the full value and benefit of the tax credit without the need to turn to inaccessible tax equity markets, and we look forward to working with Congressional leaders in the 117th Congress on this and other important tools to ensure CCUS deployment.
The Omnibus Appropriations Act of 2021 amounts to a significant legislative achievement for CCUS technologies. CURC commends the Congress for the years of diligent work that led to this critical legislation soon becoming law.”