Kudos to EPA for their Notice (attached) informing that carbon capture and sequestration (CCS) doesn’t meet the Clean Air Act’s definition of “best system of emissions reduction” (BSER). This common sense determination is a setback for companies chasing the generous 45Q tax credits that their lobbyists succeeded in retaining and enhancing in the One Big Beautiful Bill (table below).
Per the Notice: “EPA is finalizing the determination that 90 percent CCS is not the BSER for existing long-term coal-fired steam generating units because 90 percent CCS has not been adequately demonstrated, the costs of 90 percent CCS are not reasonable, and the associated degree of emission limitation is not achievable.”
EPA further determined “that previous projects that failed to achieve 90 percent CCS were not a sufficient basis to conclude the technology has been adequately demonstrated. Additionally, the carbon dioxide (CO2) capture, pipeline, and sequestration infrastructure necessary to implement 90 percent CCS for the fleet of existing coal-fired steam generating units does not currently exist and would need to be broadly deployed.“
EPA sensibly concludes (p. 58969) that the 45Q tax credit should NOT be accounted for when evaluating the reasonableness of the costs of the BSER. The carbon disposal industry has discounted the risks and overstated the benefits of CCS in their pursuit of those tax benefits, on which that industry is dependent.
Meanwhile. the Texas Railroad Commission by a 2-1 vote just approved a major carbon disposal project despite strong local opposition. The Rose Project will dispose of 53 million metric tons of carbon dioxide ($4.5 billion in tax credits).
Extension of the carbon disposal industry to Federal offshore waters appears to have failed. Only 7 of the 163 OCS oil and gas leases wrongfully acquired by Exxon and Repsol for carbon disposal purposes remain in effect. Those 7 leases will probably be relinquished before they expire in 2027.
