๐บ๐ธ Yesterday, the Carbon Dioxide Removal Investment Act (hashtag#CDRIA) was introduced to the U.S. Senate by Senator Michael Bennet (D-CO) and Senator Lisa Murkowski (R-AK). Having analysed it in detail, I am thoroughly impressed. Here is what you need to know:
๐ค The CDRIA is *bipartisan*, significantly increasing its chances of success.
๐ญ It establishes a new production tax credit (PTC) - the 45BB. PTCs were originally designed for renewable energy production and are a tax benefit based on the volume of production (so $ per quantity).
โ It is genuinely tech-neutral. The main criteria is durability of more than 1,000 years, which is in line with the latest science. Further, projects need to provide a net-negative lifecycle assessment.
๐ต It would create a new tax credit worth $250 per metric ton of CO2 removed (and $110 for point source CDR like BECCS). This would be higher ($180/$85) and broader (not just DACCS/BECCS) than 45Q. Projects will not be able to double dip with 45Q. It is either, or.
๐ What about nature-based solutions (hashtag#NBS) which would not pass the durability threshold? Look, we need all solutions. And I hear the frustrations by all those who are not included here. Having said that, a PTC is not the right vehicle for NBS. The upcoming Farm Bill in particular, as well as USDA and the US Forest Service, offer a magnitude of ways to promote nature-based carbon removal.
๐ I am so excited about this bill. I was just vigorously nodding along as I was reading it. While this doesnโt solve the demand problem CDR faces, it would completely change the unit economics for CDR companies in the U.S., just like 45Q did for DACCS. European policy makers, take note!
๐ Huge shout-out to everyone involved. I know some of you have been thinking about this for years (looking at you Giana Amador and Carbon Removal Alliance). Well done!
๐ Check out the full bill here - I promise itโs worth the read: https://lnkd.in/dfWbaWtu
๐ก Note: this bill has been introduced in the Senate only. It still has a long way to go. It will need to be introduced in the House of Representatives (ideally also in a bipartisan way) and then pass both Chambers. Given the priority on the confirmation of Trump and his appointees, progress is unlikely before Q2 2025. If you know more, please share.
โ What is your read of this bill and its chances of success?
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