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CNC Releases White Paper Calling for CCUS Incentives

AUSTIN – The Carbon Neutral Coalition (CNC) today released a white paper calling for the state of Texas to authorize economic incentives, such as tax credits or property tax reductions, that support Carbon Capture Utilization and Storage (CCUS) to preserve the fossil fuel industry and reduce carbon dioxide emissions. 

 

“Texas has a strong energy and manufacturing industry that employs hundreds of thousands of people,” said CNC Founder Corbin Robertson Jr.”Carbon capture utilization and storage will help to maintain and expand these businesses and jobs while protecting the environment.” 

 

To read the full paper, click here.

 

Below are excerpts from the paper:

 

The fossil fuels industry is faced with the dual problems of meeting increasing fossil fuels energy demand while also dealing with increased market – and – regulatory pressure to reduce greenhouse gas emissions. To address these problems, new technology and innovation is being advanced in the industry. One of these processes, Carbon Capture, Utilization, and Storage (CCUS) has been billed as part of a viable solution to achieve carbon neutrality without undermining the advancements of mankind’s quality of life to which the abundance and use of fossil fuels have dramatically contributed over the last 150 years. However, CCUS is a costly and complex process. For Texas to take advantage of the opportunity CCUS provides, Texas has a unique opportunity to achieve – continued robust production of energy, but with lowered carbon emissions – with the addition of critical incentives.  

For CCUS, the existence of reservoirs and available pore space in Texas play a key role in their feasibility.

Due to its storage resources available, and current infrastructure already in place, Texas stands to play a significant role in the development and advancement of CCUS.

As Texas has relied on wind and solar in the interest of clean energy, the state can and should move toward incentivizing projects like CCUS, which will allow for the continued production of Texas hydrocarbons while also meeting goals of lower carbon energy. Because CCUS is complex and still emerging as an industry, it requires significant integration across technical and legal disciplines as well as large capital investment for companies during the development, construction and operation phases. Costs for CCUS projects are estimated to cost approximately $400 million per 1 million tons per annum., captured and stored, divided among the cost of capture, transportation, and storage. This significant cost requires some type of financial incentive for companies looking to enter the CCUS industry, particularly as the regulatory, legal, and economic frameworks are still being developed or need clarification both on a federal and state level.

The Legislature created a tax credit for clean energy projects in 2013, aimed at coal projects. Though now expired, the statute provides a good framework to build upon for the clean energy project that is CCUS. The statute provided a tax credit equal to the lesser of 10% of capital costs of the projects or $100 million, and was limited to three projects, to be carried forward for no more than 20 consecutive years.

Another potential for tax relief falls under the Tax Relief for Pollution Control Property Program, called “Prop 2”, which provides tax relief for facilities using certain property or equipment for pollution control. The TCEQ program offers tax relief for pollution control property or facilities that are used to “meet or exceed laws, rules, or regulations adopted by any environmental protection agency of the United States, Texas, or a political subdivision of Texas, for the prevention, monitoring, control, or reduction of air, water, or land pollution.

The Texas Emissions Reduction Program (TERP) offers financial incentives to eligible businesses and others for the reduction of emissions from vehicles and equipment. Texas Council on Environmental Quality (TCEQ) administers the program, funded by revenues from fees and surcharges relating to certain off-road equipment and on-road vehicles. TERP is intended to help Texas meet the goals of reduced pollution and improved air quality. 

Texas has the opportunity to lead the way in showing that the fossil fuel industry is ready to continue to provide affordable energy, electricity, and a vast array of products for the benefit of consumers while still improving our environment through lower carbon emissions. Consumers will continue to need fossil fuels for electricity, fuels, and products, but their production and use can become carbon neutral through CCUS. CCUS can be the answer to meeting government-mandated reductions in emissions, without harming the vital fossil fuel industry. 

 

ABOUT THE CARBON NEUTRAL COALITION

 

The Carbon Neutral Coalition (CNC) is seeking to establish the infrastructure that will incentivize the energy industry to cut their carbon emissions by utilizing Carbon Capture Utilization and Storage (CCUS). The CNC will work with existing oil and gas and energy stakeholders to advocate that the state create the regulatory framework to establish this infrastructure and ensure the preservation of the energy industry in Texas.

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