Policy Solutions

Carbon Capture

Storing and Reusing CO2

To limit emissions, manufacturing facilities can install technology that captures CO2 before it is released into the atmosphere. Carbon capture technologies allow captured carbon to be stored underground or used to produce carbon-based products such as electrofuels, concrete, and chemicals. Direct air capture (DAC) is a related technology that pulls CO2 out of the air for use or storage.

Carbon capture and DAC technologies can be important tools in reaching net-zero emissions across the economy, but they cannot scale up to the level they are needed without durable policy support to accelerate investment and deployment. Carbon capture and DAC technologies have faced some criticism from environmental jJustice and other groups concerned with local air quality and land use impacts and enhanced oil recovery (EOR)—policies must also ensure that deployment results in net-zero/negative emissions overall. . Durable policy support for these technologies should include consideration of all air quality and economic impacts, especially those affecting low-income and historically disadvantaged communities.

Market Challenges

  1. Insufficient Existing Carbon Markets

    Existing policies that create markets for using or storing CO2, such as California’s Low Carbon Fuel Standard (LCFS) and the federal 45Q tax credit, represent positive initial opportunities for deployment. However, they have not yet achieved scale. Markets for CO2 as a product, such as the food and beverage and (EOR) industries, have long-established incumbent supply chains for CO2 which comes mostly from cheaper natural sources than captured CO2. Further policy interventions are needed to create large markets for new sources of captured CO2 to serve.

  2. Regulatory Uncertainty

    Regulatory uncertainty currently surrounds carbon capture and sequestration permitting. CO2 injection permitting is currently a 5-to-6 year process. These long timelines present myriad challenges for project financing. Without clear, practical rules, investors may avoid pursuing carbon capture and DAC projects.

  3. High Cost Compared to Alternative

    Today, CO2 from natural or “terrestrial” sources tends to be cheaper than CO2 captured from manufacturing facilities or via DAC. Though policies like the LCFS and the 45Q tax credit create an incentive for storing CO2, this incentive is not currently enough to overcome the high initial costs of DAC and carbon capture technology. Without a comprehensive framework that values captured carbon and carbon removal, such as a carbon price or other incentives, these technologies will not deploy at the scale required to reach net-zero emissions.

Technology Innovation Examples

Phases of Technology
Research and Development
Validation and Early Deployment
Large Scale Deployment

Carbon capture, utilization, and storage (CCUS) is already a cost-effective means of cutting emissions in some parts of the manufacturing sector and has the potential to be so in others. Carbon capture technology removes CO2 from the exhaust that manufacturing processes and power plants create. Instead of being released into the atmosphere, the captured CO2

CO2 can be captured from the fuel prior to its combustion through gasification or reforming, or from the gas the plant exhausts, typically using a thermally regenerated amine-based process. The fuel can also be combusted in pure oxygen, resulting in a purer CO2 stream that is more easily captured and purified. Using carbon capture in industrial plants can cut the emissions from carbon-intensive processes such as steel and cement production. Further development of transformational new low-cost, high efficiency CO2-capture technologies can bring this potentially powerful solution into widespread commercial use.

Industrial Carbon Capture
Carbon capture can be used to remove the CO2 from waste streams of industrial facilities or power plants to be stored safely underground or used in products.

Coupled with either industrial CO2 capture or direct air capture (DAC) capabilities, captured CO2 can be used for both existing manufacturing processes and emerging technology approaches. Both carbon-neutral fuels and carbon-negative materials offer significant GHG offset impact potential. Syntheses of small molecules from CO2 enable the production of additional chemicals, fuels, and materials.

The technologies to convert these versatile building blocks into other molecules include both thermochemical and electrochemical approaches. They also incorporate an increased deployment of renewable electricity, allowing renewables to further decarbonize more manufacturing processes.

CO2 to “X”
Electrochemical reduction of CO2, conceptualized here, is one method to convert captured CO2 into value-added small molecules and chemicals using renewable energy.

Carbon Capture Policy Recommendations