Carbon Capture, Utilization, and Storage in theUnited States: Key Policy and Regulatory Updates
CCS Technical Workshop 2022
January 21, 2022 (Tokyo)

Biden Administration: climate priorities• Re-establishing U.S. leadership in climate: climate crisis will be central to U.S. foreign policy and nationalsecurity– Rejoined the Paris Agreement– Held the Leaders’ Climate Summit to raise climate ambition• Taking a government-wide approach to the climate crisis: National Climate Task Force• Building a 100% clean energy economy– 50% emissions reduction by 2030
– 100% clean electricity by 2035– net-zero carbon emissions by 2050

• Developing a climate finance plan
• Modernizing infrastructure towards a sustainable economy– “Greening” federal government procurement– Ensuring procurement and awards support the use of American-made goods and services in the clean energy supply chain• Empowering workers and marginalized communities
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2Biden Administration: priorities for CCUS and CDR• Energy: Department of Energy (DOE) will be essential to President Biden’s climate
mission to push the frontiers of science and engineering and catalyze clean energy jobs
through research, development, demonstration, and deployment (RDD&D)• Carbon capture, utilization, and storage (CCUS) and Carbon Dioxide Removal(CDR)– Expanding CDR technologies such as direct air capture (DAC) and bio-energy with carbon captureand storage (BECCS)– Simultaneously bring new carbon capture technologies to market and continue to fund carbon
capture research, development, and demonstration (RD&D)– Enhance tax incentives for CCUS
– Retrofits for existing power plants– Decarbonizing industry, especially in hard-to-abate sectors

fecm.energy.gov3Strong legislative support for CCUS/CDR/clean hydrogen• Recently enacted bipartisan bills provide policy support & funding:– Energy Act of 2020 – an update of U.S. energy policy & a funding authorization billthat includes consensus provisions from the American Energy Innovations Act– Consolidated Appropriations Act (2021) – provides funding for CCUS/CDR &incorporates authorization provisions contained in the Energy Act of 2020
– Infrastructure Investment & Jobs Act (IIJA) – appropriated over $20 billion forCCUS/CDR & Clean Hydrogen RD&D, including many authorized under the Energy
Act of 2020

• Bill being debated/negotiated:– The Build Back Better Act is still being negotiated but is likely to support
CCUS/CDR (a recent version reportedly included a $180/metric ton carbon credit forDAC)
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4Carbon Management funding in the bipartisan
Infrastructure Law (IIJA)• Through the Bipartisan Infrastructure Law, DOE will deploy approximately $12 billion in
new direct carbon management funding and financing over 5 years:– Carbon Dioxide Removal through DAC
o Regional DAC Hubs: $3.5 billion
o DAC Technology Prize Competition: $115 million– Engineered Stack Capture (point-source)o Carbon Capture Demonstrations and Large Pilots: $3.5 billion
o Carbon Capture Technology Program: $100 million– Carbon Dioxide Utilization and Storageo Carbon Storage Validation and Testing: $2.5 billion
o Carbon Utilization Program: $310 million

On December 6, DOE released aRequest for Information on
Deployment-Ready Carbon Reduction
and Removal Technologies to Guide theSelection and Management ofInvestments under the Bipartisan
Infrastructure Law. Responses are due at5pm on January 24– Carbon Dioxide Transportation Infrastructure Finance and Innovation: $2.1 billion• DOE will deploy an additional $8 billion for hydrogen hubs:– At least four projects, including at least one using fossil fuels with carbon management
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IIJA: Large-scale pilot and commercial demonstration
projects for DAC• Provides $3.5 billion for four regional DAC hubs with at least 50% private sector
cost sharing• Defines a DAC regional Hub as a “network of DAC projects, potential CO2
utilization off-takers, connective CO2 transport infrastructure, subsurface
resources, and sequestration infrastructure located within a region”• Requires that each Hub must facilitate the deployment of DAC projects; have thecapacity to sequester and/or utilize 1 million metric tons of CO2 annually, must
demonstrate the capture, processing, delivery, and sequestration or use of thecaptured carbon, must show it could be developed into a regional carbon network
to facilitate CO2 sequestration or use
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IIJA: Large-scale pilot and commercial demonstration
projects for point-source carbon capture• Provides $937 million for pilot projects with at least 20% privatesector cost sharing• Provides $2.5 billion for commercial demonstration projects
with at least 50% private sector cost sharing• Provides $100 million for front-end engineering and design(FEED) under the Carbon Capture Technology Program

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IIJA: CO2 utilization, transportation, and storage• Adds a CO2 utilization grant program authorized in P.L. 116-26 and provides $310 million• Amends P.L. 116-26 to add FEED program for CO2 transport infrastructure and provides$100 million• Requires DOE to develop a large-scale carbon storage commercialization program andprovides $2.5 billion for new or expanded commercial, large-scale carbon sequestration
projects and the associated CO2 transport infrastructure (with at least 20% private sectorcost sharing)• Provides $2.1 billion for DOE to establish a CO2 Infrastructure Finance and Innovation Act(CIFIA) Program to provide CO2 transportation infrastructure projects or associatedequipment with federal credit instruments, loans, and grants to finance shared CO2transport infrastructure

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IIJA: Hydrogen Hub provisions• Feedstock diversity, including a requirement that at least one regional cleanhydrogen hub demonstrate the production of clean hydrogen from fossil fuels,
one from renewable energy, and one from nuclear energy• End-use diversity, including at least one hub to demonstrate clean hydrogenuse in the electric power generation sector, one in the industrial sector, one in theresidential/commercial sector, and one in the transportation sector• Geographic diversity: including at least two hubs to be located in regions withthe greatest natural gas resources• Employment opportunities: hubs most likely to create opportunities for skilled
training and long-term employment

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IIJA: Other provisions relevant to CCS• U.S. Environmental Protection Agency (EPA) received funding
for Class VI permitting– $5 million for each of fiscal years 2022 through 2026 for EPA permitting– $50 million for the period of fiscal years 2022 through 2026 to establish
and implement state permitting programs• Congress clarified regulations for offshore CO2 storage– Within one year, the Secretary of the Interior shall promulgate
regulations for injection of a carbon dioxide stream into sub-seabedgeologic formations for the purpose of long-term carbon sequestration
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10Class VI Project Interest in EPA Implemented Programs

Source: U.S. EPA

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11Section 45Q tax credits• Tax benefits have been available since 2008 for qualified CCUS projects in the United States• In 2018, benefits were significantly expanded and extended to include:– Increased credit amount:
Saline storage: $50/metric ton; utilization: $35/metric ton– Expanded qualified carbon oxides to include carbon monoxide– Expanded qualified uses to include CO2 utilization other than enhanced oil or natural gas recovery• Congress recently approved a two-year extension of credit (Consolidated Appropriations Act, 2021)– Construction must begin by January 1, 2026

• The Internal Revenue Service (IRS), in consultation with EPA, DOE, and other agencies, finalized the rule in January
2021, providing clarified guidance to stakeholders on areas such as:– Monitoring and verification for geologic storage– Life cycle analysis provisions for utilization– Recapture of carbon dioxide– Definition of carbon capture equipment– Qualified facility (ex: industrial or DAC)

• Over 80 projects are in various development stages, having been inspired by 45Q updates and state-level incentives
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State policies and incentives for CCUS
• Financial assistance for CCUS projects and CO2 pipelines, often asgrants or loans• Low Carbon Fuel Standards (LCFS) or other energy market credits(case dependent) recognizing CCUS
• State assumption of long-term liability for sequestered CO2 reduces thelong-term costs of CO2 injection for private project developers• Off-take agreements, which provide a guaranteed buyer for the output
from projects integrating CCUS• Sector-specific cost recovery mechanism or portfolio standards
recognizing CCUS
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FE to FECM: a new mission• To minimize the environmental impacts of fossil fuels while working towards net-zero emissions.
The Office’s programs use RDD&D approaches to advance technologies to reduce carbon
emissions and other environmental impacts of fossil fuel production and use, particularly thehardest-to-decarbonize applications in the electricity and industrial sectors.
• Priority areas of technology work include point-source carbon capture, hydrogen, methane
emissions reduction, critical mineral production, and carbon dioxide (CO2) removal to address theaccumulated CO2 emissions in the atmosphere.
• The Office recognizes that global decarbonization is essential to meeting climate goals and works toengage with international colleagues to leverage expertise in these areas.
– Recent announcements: DOE/US Geological Survey Memorandum of Understanding on Storage Capacity• The Office is committed to improving the conditions of communities impacted by the legacy of fossil
fuel use and to supporting a healthy economic transition that accelerates the growth of good-paying
jobs.
– Recent announcements: Communities LEAP (Local Energy Action Program) Pilot

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Carbon Negative Shot
Durable and scalable carbon dioxide removal
under $100/net metric ton within a decade
Carbon Negative Shot defines key
performance elements for a necessaryand nascent industry which can help
ensure CDR is a responsive andresponsible tool so that multiple true,durable removal pathways can be
deployed at their most affordable costat the scale required to address theclimate crisis.

Less than $100/net metric ton CO2e for both
capture and storage
Robust accounting of full lifecycle emissions
High-quality, durable storage with costs
demonstrated for MRV for at least 100 years
Enables necessary gigaton-scale removal
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Hydrogen Energy Earthshot Initiative (HEEI)HEEI Goals:• $1/kg H2• One decade (i.e., 2030)• “1, 1, 1”• HEEI launched in June 2021
• FECM hydrogen R&D contributing to HEEI – identify potential
pathway to meet the HEEI goals and (informal) emissions
intensity goal via screening analyses
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FECM R&D funding$ millions
400

Carbon Capture
Carbon Utilization

350

Carbon Storage
Carbon Dioxide Removal

368
63300
250

38217.821200

20710196.3
10198.7
12198.7
12150

96

85.3

8686

79

100
50
0101

101

100.7

100.7

117.8

FY 2016

FY 2017

FY 2018

FY2019FY 2020

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228.3
40
23

117

79
86.3
FY 2021150

FY2022
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FECM RDD&D priorities
Demonstrate and Deploy Point Source Carbon Capture
RDD&D for CCS in the power and industrial sectors to enablewider, strategic commercial deployment to meet net-zeroemissions goals by 2050

Reduce Methane Emissions
Develop technologies and deploy regional initiatives to monitor
and reduce methane emissions from fossil fuel infrastructure
including coal, oil, and gas

Advance Carbon Dioxide Removal & Low Carbon Supply Chainsfor Industry
Develop DAC and mineral carbonation projects and novel
approaches to recycle carbon emissions

Advance Critical Minerals, Rare Earth Elements (REE), andMine Remediation
Improve REE separation/recovery technologies to manufacture
products from CO2 and carbon ores and to address current
market and process economics. Advance R&D to address
abandoned mines

Develop Low-Carbon Industrial Supply Chains
Develop novel approaches to recycle carbon emissions intovalue-added products such as concrete, steel, chemicals, andfuels using systems-based carbon management approaches
consistent with realizing a net-zero carbon economy by 2050

Increase Efficient Use of Big Data and Artificial Intelligence
Use AI, machine learning, and data analysis to create learningalgorithms within a large dataset to help discover new material,
optimize processes, and run autonomous systems

Accelerate Carbon-Neutral Hydrogen (H2)
Develop technologies that leverage the natural gas infrastructurefor H2 production, transport, storage, & use, coupled to carbon
management

Address Energy Water Nexus
Advance efficient use of scarce water resources and water
remediation technologies to address environmental impacts
related to produced or displaced water in fossil fuel industries,
in addition to that associated with dedicated CO2 storage

Invest in Thoughtful Transition Strategies
Invest in technologies and approaches and deploy regional initiatives to help create an equitable and justtransition to a net-zero carbon economy in energy communities
fecm.energy.gov18Integrated R&D approach for future commercial-scale
deployment

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FECM Memorandum of Understanding with U.S.
Geological Survey (USGS)• Cooperation regarding assessments of global, regional, andnational carbon dioxide storage resources• Collaborate with international governments, geologic surveys,
and other organizations• Technical assistance through discussions, meetings,workshops, and research activities• Better understanding of current and potential resources forgeologic CO2 storage
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20International partnerships
Multilateral Partnerships

International Energy Agency (IEA)• Working Party on Fossil Energy (WPFE)• CCUS Unit – CCUS Roadmap and International CCUS Regulatory Network
Technology Cooperation Programmes (TCP):‒ Greenhouse Gas R&D Programme (GHG)‒ Hydrogen

Clean Energy Ministerial (CEM) CCUS Initiative
Carbon Sequestration Leadership Forum (CSLF)
Mission Innovation Carbon Dioxide Removal Mission (MI-CDR)
International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE)UN Economic Commission for Europe (UNECE)
Accelerating CCS Technologies (ACT) initiative
Global CCS Institute (GCCSI)
Asia CCUS Network

Bilateral Partnerships(with over a dozen countries)

fecm.energy.gov21U.S.-Japan bilateral partnership• Memorandum of Cooperation on CCUS and Carbon Recycling– Cooperation includes DAC and low-carbon hydrogen / fuel ammonia– Integral to the U.S.-Japan Clean Energy and Green Growth Initiative (CEGGI)– Collaboration through the Asia CCUS Network• CCUS/Carbon Recycling Working Group– Co-led by DOE’s Assistant Secretary for FECM and Ministry of Economy,
Trade and Industry’s Director General for Natural Resources and FuelDepartment– 1st Working Group (WG) meeting held in December 2021 (virtual)– Follow-on WG meetings under planning, including in-person events post
pandemic
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Contact Information

Questions?

Adam Wong, adam.wong@hq.doe.gov
Ayaka Jones, Ayaka.jones@hq.doe.gov