In a policy brief published recently as part of a series by the World Resources Institute, Katie Lebling, Jennifer Rennicks and Haley Leslie-Bole have presented the Carbon Dioxide Removal Investment Act that has been introduced by two US senators.
Within this context, they have first highlighted that the 45Q tax credit, the only fiscal incentive provided by the federal government to facilitate the uptake of CDR, suffers from drawbacks as it is only applicable to direct air capture (DAC) and bioenergy with carbon capture and storage (BECCS). Then, they have set out the following novelties that have been proposed as part of the Carbon Dioxide Removal Investment Act and mark a departure from the rules governing the 45Q tax credit:
i) Calculation of the total amount of carbon dioxide that is removed by not only considering the amount of carbon dioxide that is removed but also quantifying the amount of carbon dioxide that is emitted during carbon dioxide removal and sequestration;
ii) Applicability of fiscal incentives to all CDR methods except for BECCS that generates revenue due to producing energy;
To be eligible for a tax credit under the proposed Carbon Dioxide Removal Investment Act, applicants must:
i) prove that it is quite likely that they can store carbon dioxide for a period that spans for at least 1000 years;
ii) have the ability to calculate the net amount of carbon dioxide that is removed with a certainty margin of around 20% and with 95% confidence interval by having recourse to field experiments;
iii) engage in CDR activities within regions or waters that are subject to the US regulations;
iv) initiate the CDR activity prior to January 1, 2035.
Under the proposed legislation, those that employ CDR methods by utilizing biomass and marine resources must abide by additional environmental requirements that will be determined by specialized entities.
Read the full post here: Carbon Dioxide Investment Removal Act