US – Storing CO2 And Lowering Emissions (SCALE) Act

Mayer Brown - Energy Forward

On March 17, 2021, U.S. Senators Chris Coons (D-Del.) and Bill Cassidy, M.D. (R-La.) and U.S. Representatives Marc Veasey (D-Texas) and David McKinley (R-W.Va.) introduced the Storing CO2 And Lowering Emissions (SCALE) Act. The bill is intended to help develop infrastructure buildout to transport CO2 from the capture site to be used as feedstock for the manufacture of other products, to oilfields where it is injected to enhance oil recovery, or to underground storage locations.  CO2 capture projects are expensive and the EPA permitting process for storage facilities is lengthy.  Thus, project financing and permitting are key drivers to determine the speed and scope at which global climate goals with respect to greenhouse gas reduction are achieved.  The 45Q tax credit for carbon capture and sequestration incentivizes carbon capture but is not by itself economically sufficient to provide the necessary equipment and transportation infrastructure.

The SCALE Act will help bridge the gap by:

  • Establishing a carbon-to-value research and development center to support the development of low and zero-carbon fuels, chemicals, building products, materials and other products of commercial value manufactured from captured CO2;
  • Providing for low-interest grants and loans to cover a portion of the cost of transportation infrastructure development;
  • Expanding the Department of Energy’s CarbonSAFE program, which provides cost-share for the development of saline geologic storage projects;
  • Providing increased funding for EPA permitting of Class VI carbon injection wells; and
  • Providing grants to help States obtain Class VI well permitting primacy and establish their own permitting programs in accordance with EPA guidelines.

The SCALE Act also provides economic opportunities and creates jobs – A report issued as part of the Decarb America Project indicates that the SCALE Act may create approximately 13,000 jobs per year. “Building out midstream and downstream infrastructure is a key component of supporting the deployment of carbon capture technologies,” said Representative McKinley. “For carbon capture to work, we need to be able to transport it to geologic storage or customers who can use it. Through additional investments proposed in this bill, the U.S. can take significant steps towards reducing its carbon emissions by developing a program that will support the construction of CO2 pipelines across the country and create countless jobs.”  Many countries have already committed substantial funds for CO2 transport and storage infrastructure and the SCALE Act provides federal support for CO2 transport and storage infrastructure within the US.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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