Bipartisan Legislation Would Help Finance Carbon Capture and Storage Projects
Washington, D.C. – U.S. Senators Michael Bennet (D-CO) and Rob Portman (R-OH) today reintroduced a bill to make it easier for power plants and industrial facilities to finance the purchase and installation of carbon capture, utilization, and storage equipment.
“Reducing carbon pollution while creating good-paying jobs is something that Democrats, Republicans, labor unions, industry, and environmentalists can all get behind,” said Bennet. “Our legislation would help reduce carbon pollution by making it more cost effective for power plants and industrial facilities to invest in carbon capture equipment. This is a significant step to ensure we are boosting Colorado's clean energy economy and keeping our air clean as the threat of climate change continues to grow.”
“This bill is a win-win for jobs and the environment, and I’m proud to continue my work on this issue with Senator Bennet,” said Portman. “Carbon capture is a common-sense solution that will allow states like Ohio to continue to utilize our natural resources while protecting our environment at the same time. This bipartisan measure is supported by business groups, energy groups, and environmental groups alike, and I urge all of my colleagues to support it.”
The Carbon Capture Improvement Act would allow businesses to use private activity bonds (PABs) issued by local or state governments to finance a carbon capture project. These bonds are beneficial to consumers and businesses because they are tax-exempt and can be paid back over a longer period of time. If more than 65 percent of carbon dioxide emissions from a given facility are captured and injected underground, then 100 percent of the eligible equipment can be financed with PABs. If less than 65 percent is captured and sequestered, then tax-exempt financing is permitted on a pro-rated basis. PABs have been used for decades to finance pollution control equipment at U.S. power and industrial facilities; capturing carbon dioxide is a logical next step.
The bill text is available HERE.
Statements in support of the Carbon Capture Improvement Act:
“If we’re going to have a chance at meeting emissions reduction goals, specifically net zero emissions, carbon capture technology must be part of the solution,” said Michael Langford, President, Utility Workers Union of America. “This important legislation helps to make that possible by easing access to capital to build the infrastructure that will bring more carbon capture projects to life. Workers and communities are depending on measures like these to help lower emissions and sustain local economies.”
“The Carbon Capture Coalition is pleased to endorse the Carbon Capture Improvement Act of 2019, federal legislation to authorize the use of tax-exempt private activity bonds to help finance the purchase of carbon capture equipment for installation at power plants and industrial facilities. Private activity bonds are a well-developed financial instrument that has proven successful over decades in reducing the cost of financing for a broad range of private infrastructure projects that provide significant public benefits,” said Brad Crabtree, Co-director of the Carbon Capture Coalition. “Carbon capture projects are capital intensive and typically require long periods of time to develop and construct, which increases financial risk for project developers and private investors. By providing access to tax-exempt bonds that can be paid back over a longer timeframe, this legislation provides an important tool for reducing the cost of capital for carbon capture projects at industrial facilities and power plants. The Coalition commends Senators Bennet and Portman for their bipartisan leadership, and we look forward to supporting their efforts to enact this urgently-needed legislation to scale up private investment in critical carbon capture technology in the marketplace.”
“Private activity bonds are a well-developed tool that has been used for decades to cut the cost of financing a broad range of energy-related infrastructure. The time is right to apply them to accelerating carbon capture projects with major environmental and economic benefits – and little cost to taxpayers,” said Dan Reicher, Founding Executive Director of the Stanford Steyer-Taylor Center for Energy Policy and Finance and Lecturer, Stanford University.