Committed to implementing CCU? A comparison of the policy mix in the US and the EU

Abstract

Carbon capture and utilization (CCU) technologies aim to use carbon dioxide (CO2), either captured from industrial point sources or from the atmosphere, instead of fossil carbon in the production of a variety of valuable goods. CCU has the potential to contribute to emission reductions and to lower raw material consumption as well to foster transitional processes toward a circular economy. To enable societies to take full advantage of this potential, policy support is needed in overcoming current barriers and fostering CCU implementation as a feasible option for the industry. Based on a literature and online investigation, this paper identifies and compares the current policy mixes for CCU in the US and the EU, focusing on policy strategies and existing and proposed policy instruments. The analysis shows that US strategy documents, with very few exceptions, do not mention CCU specifically in the context of the country's 2030 or 2050 climate targets. In the EU, in contrast, the future role of CCU is clearly linked to achieving climate-neutrality by 2050. The main policy instruments to incentivize the implementation of CCU in the US are tax credits (45Q). Moreover, funding exists for research and development efforts. In the EU, many reform proposals are currently underway that could benefit CCU technologies. At present, policy support, for instance through the Renewable Energy Directive, mainly aims at renewable fuels of non-biological origin while in other areas CCU support remains at odds with principles such as “energy efficiency first”. The EU does, however, have a broad range of funding opportunities available for research, development and demonstration projects. The paper uses the cross-regional comparison of policy mixes to formulate policy recommendations to improve policy mixes for CCU. A clearer strategic commitment to CCU, its incorporation into green public procurement guidelines, incorporating CCU across different funding schemes for sustainable energy transition, and ambitious new targets for renewable electricity and green hydrogen, for instance, could help develop the policy mixes further to provide a supportive framework for CCU.

CCUS Technology and Carbon Emissions: Evidence from the United States

“…Table 4 presents the results of the AIC and BIC values for each model. Remarkably, the Elastic Net model outperforms the others, demonstrating the lowest AIC and BIC values in the CCUSCap Equation (8). Conversely, OLS performs comparatively better than other models in the case of CO2E Equation (9).…”

“…Unexpectedly, Govpol did not drive the increase in the US's CCUS capacity over 50 years, as earlier policy instruments implicitly and partly covered CCUS until the enactment of the 45Q tax credit under the Energy Improvement and Extension Act in 2008 [9]. Although the 45Q tax credit underwent major reform in 2018, the US still lacks a legislaturebased climate strategy at the federal level [8]. Additionally, we cannot statistically deduce the relationship between CO2E and CCUSCap, given the disparity between CO2E and CCUS expansion over five decades.…”

“…Several factors contribute to the limited implementation of CCUS projects. This includes high costs associated with CCUS technologies acting as a deterrent, compounded by insufficient financial incentives [6] and supportive government policies [7], complex regulatory requirements, technical challenges, and public perception concerns further hindering adoption [7,8]. Additionally, the availability of alternative emission reduction methods and limited awareness about CCUS benefits contribute to the issue [9].…”

Utilizing CO2 as a strategy to scale up direct air capture may face fewer short-term barriers than directly storing CO2

“…Rather, this pathway needs new regulations to incentivize and accelerate the deployment of DACCU (e.g. blending quotas) [52,110,111] and to ensure that the hydrogen scaleup is sustainable.…”

Single-Cell Protein Production from Industrial Off-Gas through Acetate: Techno-Economic Analysis for a Coupled Fermentation Approach

“…In contrast, the production of SCP in bioreactors is highly efficient in its use of resources such as energy, water, and land [15]. Secondly, CCU of industrial off-gas is not only environmentally favorable but is also economically beneficial, as carbon taxes and emissions trading systems (ETS) are spreading and rising [44]. Thirdly, recent studies focusing on the nutritional quality of C. necator SCP for feed purposes appear highly promising, even showing positive effects for growth using SCP in the diets of fish and shellfish, amongst others [45].…”