We noticed you're browsing in private or incognito mode.

To continue reading this article, please exit incognito mode or log in.

Not an Insider? Subscribe now for unlimited access to online articles.

  • Lincolnway Energy’s Ethanol Plant operating in Nevada, Iowa.
  • photolibrarian | Flickr
  • Sustainable Energy

    The carbon-capture era may finally be starting

    Analysis of a newly approved tax credit shows it could make an immediate dent in industrial emissions and narrow the financial gap for power plants.

    The budget bill that President Donald Trump signed into law earlier this month provides a huge incentive for capturing and storing carbon emissions.

    Energy researchers who have crunched the numbers in the days since have concluded that on many projects the boosted tax credit could finally tip the scales for a technology that’s long proved far too expensive.

    The provision won’t completely offset the high cost of retrofitting power plants, though it will certainly lower the price tag. But it could make an immediate difference in cutting emissions from a source that’s otherwise very difficult to address: the industrial sector, which produces a significant portion of the greenhouse-gas emissions in the United States.

    “I think we’ll see dozens of [carbon-capture] projects appear in the next couple of years that could not have happened otherwise,” says Julio Friedmann of the Energy Futures Initiative, who was previously principal deputy assistant secretary at the US Department of Energy’s Office of Fossil Energy. 

    Most energy researchers believe carbon capture and storage will need to be a significant piece of any realistic plan to address the growing dangers of climate change. A number of studies have found that without this technology, it’s unlikely the world can prevent temperatures from rising more than 2 ˚C (see “Potential carbon capture game changer nears completion”).

    Sign up for Clocking In
    A daily look at the workplace of the future
    Manage your newsletter preferences

    The credit will apply equally to scrubbing technologies, which capture carbon dioxide from power plants and factories, and startups working on ways to pull the greenhouse gas straight from the sky, like Carbon Engineering and Climeworks (see “Test facility begins capturing carbon from air”).

    Captured carbon dioxide can be stored under geological formations or injected into drilling sites to draw up the last bits of oil. Researchers and startups are also exploring ways to use carbon dioxide to produce alternative fuels, building materials, and other products. The tax credit is likely to stimulate significant investment in these emerging technologies, Friedmann says.

    The measure was sponsored by an unlikely coalition of climate deniers and hawks—notably Senators John Barrasso, a Republican from Wyoming, and Sheldon Whitehouse, a Democrat from Rhode Island—and supported by unions, environmental groups, and coal companies. 

    Here are the basics: The measure provides a tax credit of $50 for every metric ton of carbon dioxide buried underground and $35 for every ton put to work in other ways. Companies will have six years to begin qualifying projects, and a dozen from the time they begin operations to claim the credits.

    An earlier version of the tax credit stood at $20 and $10, respectively, and was capped at 75 million tons, which simply didn’t provide enough long-term certainty to spur many projects.

    The estimated cost of carbon capture is about $60 per metric ton for coal-fired plants and around $70 for natural-gas plants, according to a 2015 report from the Office of Fossil Energy. Another $11 goes to transporting and storing the carbon dioxide. So the tax credit still can’t, in and of itself, offset the costs for the electricity sector today.

    But it could make the financial difference for some plants tapping into other sources of subsidies, particularly as the price of carbon capture falls over the next few years, says Matt Lucas, associate director at the Center for Carbon Removal, a nonprofit in Oakland, California.

    Moreover, the new tax credit should already be enough to offset the cost of carbon-capture systems at facilities producing things like ethanol, fertilizer, ethylene oxide, and other processed fuels. Those costs range from $9 to $30 per ton, according to an earlier report from the Office of Fossil Energy. In these cases, carbon capture isn’t as expensive because the processes result in higher concentrations of the gas. (Carbon-capture costs for cement and steel, two of the biggest industrial emitters, are still closer to $100 per ton.)

    Making carbon capture affordable for the industrial sector is critical since there are few affordable ways to clean up many of these businesses, largely because the gas is a by-product of production itself. They’re also major contributors to total greenhouse emissions: ethanol production alone accounts for 2 percent of the nation’s carbon dioxide, while fertilizer production accounts for 1 percent.

    Tech Obsessive?
    Become an Insider to get the story behind the story — and before anyone else.

    Subscribe today
    More from Sustainable Energy

    Can we sustainably provide food, water, and energy to a growing population during a climate crisis?

    Want more award-winning journalism? Subscribe to Insider Plus.
    • Insider Plus {! insider.prices.plus !}*

      {! insider.display.menuOptionsLabel !}

      Everything included in Insider Basic, plus the digital magazine, extensive archive, ad-free web experience, and discounts to partner offerings and MIT Technology Review events.

      See details+

      What's Included

      Unlimited 24/7 access to MIT Technology Review’s website

      The Download: our daily newsletter of what's important in technology and innovation

      Bimonthly print magazine (6 issues per year)

      Bimonthly digital/PDF edition

      Access to the magazine PDF archive—thousands of articles going back to 1899 at your fingertips

      Special interest publications

      Discount to MIT Technology Review events

      Special discounts to select partner offerings

      Ad-free web experience

    You've read of three free articles this month. for unlimited online access. You've read of three free articles this month. for unlimited online access. This is your last free article this month. for unlimited online access. You've read all your free articles this month. for unlimited online access. You've read of three free articles this month. for more, or for unlimited online access. for two more free articles, or for unlimited online access.