CCUS, including DACCS, in the US Infrastructure Investment and Jobs Act (IIAJA)

The US Infrastructure Bill includes a number of significant measures to support CCUS.

In line with the growing understanding, globally, of the critical role of ‘plumbing’ for CO2 disposal in underpinning CCUS clusters, the Carbon Dioxide Transportation Infrastructure Finance and Innovation (CIFIA) program supports the development of CO2 T&S infrastructure, based on the following principles:

  • “carbon capture, removal, and utilization technologies require a backbone system of shared carbon dioxide transport and storage infrastructure to enable large-scale deployment, realize economies of scale, and create an interconnected carbon management market”;
  • “carbon dioxide transport and storage infrastructure share similar barriers to deployment previously faced by other types of critical national infrastructure, such as high capital costs and chicken-and-egg challenges, that require Federal and State support, in combination with private investment, to be overcome”

Projects need to be of significant scale, more than $100M, and must provide common carrier services.  All modes of transport can be supported, so shipping, rail and road as well as pipelines.   A total of $2,100M is available to support setting up infrastructure with the necessary capacity for future expansion, $600M per year awarded in 2022 and 2023 and $300M per year in 2024, 2025 and 2026.

In addition, $2,500M are available over the period 2022-2026 for a ‘Large-scale carbon storage commercialization program’ to fund “the development of new or expanded commercial large-scale carbon sequestration projects and associated carbon dioxide transport infrastructure, including funding for the feasibility, site characterization, permitting, and construction stages of project development.”  Permitting costs for CO2 storage wells also receive funding, $25M at Federal level plus $50M at state level.

Direct Air Capture Hubs receive additional major support, with $3,500M allocated to four ‘ Regional Direct Air Capture Hubs’, defined as “a network of direct air capture projects, potential carbon dioxide utilization off-takers, connective carbon dioxide transport infrastructure, subsurface resources, and sequestration infrastructure located within a region.”

The IIAJA also includes support for hydrogen, with $8,000M for four hydrogen hubs, at least one of which must demonstrate ‘blue’ hydrogen production from fossil fuels with CCUS.

All of this is in addition to the 45Q tax credit program for tonnes of CO2 stored, which may be extended again in the near future.

These new developments definitely give substance to US Secretary of Energy Jennifer M. Granholm’s announcement, on Friday 5 November 2021, of a new US. Department of Energy (DOE) goal to reduce the cost of Gt-scale Direct Air CO2 Capture and Storage (DACCS) to less than $100/ton of net CO2-equivalent. As the DOE now notes this is “an all-hands-on-deck call for innovation in the expanding field of CDR—a key facet of the plan to achieve net-zero emissions by 2050.”

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