😌 A sigh of relief for CDR in the U.S.? 😌

🇺🇸 It looks like the 45Q tax credit, which has been central to the scale up of the CDR industry in the U.S., particularly DACCS, is likely here to stay.

💵 At $180/t of CDR through DACCS and $85/t for BECCS, 45Q has been central to the business case for CDR I. The U.S.

🏛️ Back in March, a bipartisan bill was introduced to repeal 45Q, a potential nail in the coffin of many CDR projects. It was referred to the House Committee on Ways and Means. Not only did this bill not progress in the Committee, but instead a new bill - “The One, Big, Beautiful Bill” (really the name of it...) - has been introduced which reaffirms the legal existence of 45Q.

📅 As a reminder, 45Q is available to any project that begin construction before 2033 and will last 12 years. So a project commissioned in 2032 and finalised in 2036 could receive 45Q until 2048.

🌏 The bill does propose significant constraints on the transferability of 45Q tax credits, with potential negative impacts on project financing. This is especially targeted at foreign entities.

👉 Note, the bill still has to go through the legislative process. It does seem to have good chances given its broad support.

📈 Overall, this is a big weight off the backs of CDR project developers and DACCS/BECCS companies in the U.S. Coupled with the recent endorsement by the White House of carbon capture, it looks like the current administration is set to continue - if not expand - its support for CDR.

👎 Now, just to be clear: the bill would be devastating for many other areas of the green transition, particularly hydrogen production and renewables. So by no means am I suggesting this is good news for climate overall, but just for carbon management / CDR.

⁉️ What is your take? Are we finally getting some clarity where CDR is heading in the U.S.?

Follow the conversation