Conventional wisdom holds that CO2 mitigation is prohibitively costly, in terms of dollars, jobs, and lost economic competitiveness. But a new generation of technologies is challenging this paradigm, by offering a way to transform CO2 into valuable products. With the right public policy incentives, these new approaches to carbon capture and utilization (CCU) could make carbon mitigation pay for itself.

The Carbon Sequestration Leadership Forum defines CCU as “‘recycling’ CO2 emitted and captured from power generation and industrial facilities into valuable products and uses.” These may include biofuels, chemicals, building materials, and even foods, to name just a few possibilities. Unsurprisingly, the economics of CCU are compelling. Recycling a “wasted” gas into higher-value products can offset the cost of carbon capture and bolster the bottom line.

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Historically, the U.S. government’s preferred approaches to carbon mitigation have been carbon capture and sequestration (CCS), which involves the injection of CO2 into vast underground caverns, and using CO2 to enable enhanced oil recovery (EOR).

Federal policy should support converting CO2 to valuable products, too.  We learned in high school chemistry that carbon is a basic building block of life, as all living organisms are made of carbon compounds. Doesn’t it make sense to use carbon for beneficial purposes?  The paradigm for carbon mitigation needs to shift away from characterizing carbon as a waste and treating it instead as a valuable raw material.   Essentially, carbon should be monetized.

As noted above, CO2 has many beneficial uses. Yes, it can be injected into wells to enhance oil recovery. But it can also act as a bio-fertilizer by increasing the carbon content of depleted soil to enhance the cultivation of crops and production of biomass. It can serve as a nutrient to accelerate the growth of algae to create high-performance biofuels. It can be used as a building block for the production of products, such as synthetic cement and plastics.  It can even be converted to baking soda. Several of these emerging end-uses would displace existing needs for petroleum and other fossil fuels, paying additional environmental dividends.

The innovative emerging technology companies that are developing these and other carbon utilization solutions face an uphill battle because  federal policy provides more support for carbon sequestration than carbon utilization.  One example of this is the Section 45Q tax credit for carbon sequestration which provides $10/ton to use CO2 in EOR and $20/ton to sequester it.  The credit does not provide an incentive for other CCU technologies.  The impact on the investment playing field is significant.  Investors will not back carbon utilization technologies if the federal government will give them $20/ton to sequester CO2.

The solution is simple: Level the playing field by providing an equivalent tax incentive for carbon utilization technologies.  Sens. Heidi HeitkampMary (Heidi) Kathryn HeitkampPence to push new NAFTA deal in visit to Iowa Al Franken says he 'absolutely' regrets resigning Trump nominees meet fiercest opposition from Warren, Sanders, Gillibrand MORE (D-N.D.) and Sheldon WhitehouseSheldon WhitehouseSenate Democrats push Trump to permanently shutter migrant detention facility To cash in on innovation, remove market barriers for advanced energy technologies Democrats give cold shoulder to Warren wealth tax MORE (D-R.I.), together with a number of Republican co-sponsors including Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellTwo years after Harvey's devastation, the wake-up call has not been heeded McGrath releases ad blasting McConnell with coal miners in Kentucky: 'Which side are you on?' Prediction: 2020 election is set to be hacked, if we don't act fast MORE (R-Ky.), have proposed legislation to do just that.  S. 3179, the Carbon Capture and Utilization Act, would extend the 45Q tax credit to innovative biological, chemical, and other CCU applications – without altering the eligibility of existing CCS and EOR technologies.

The federal government should follow the private sector’s lead on rethinking CO2 and begin treating it like the valuable commodity that it can be.  Enactment of S. 3179 would be an important first step.

Laurie Purpuro is Government Affairs Advisor at K&L Gates LLP, Tim Peckinpaugh is a Partner at K&L Gates LLP and Peter Nelson is an Associate at K&L Gates LLP.


The views expressed by authors are their own and not the views of The Hill.