Tech

Why the Fed spends $ 2.5 billion on carbon capture

Energy Secretary Jennifer Grenholm answers questions during a press briefing at the White House in Washington, DC, USA, November 23, 2021.

Evelyn Hawkstein | Reuters

The U.S. Department of Energy announced Thursday that it is taking the first steps to pay more than $ 2.3 billion for carbon capture technology included in Biden’s bipartisan infrastructure law, signed by the president in November, for carbon capture technology.

Carbon emissions are the result of burning fossil fuels and are a major cause of anthropogenic climate change, and the amount of carbon dioxide in the atmosphere has been steadily rising over the past 60 years.

Carbon capture technology aims to emit carbon dioxide at the point of release or into the atmosphere in a broader sense. The industry is still in its infancy, and critics say it is better to use resources to increase clean energy infrastructure.

But Energy Minister Jennifer Granholm believes there is room for both.

“Certainly our first advantage is to make sure we run on clean energy with zero carbon emissions. And we do it all. But you can walk and chew gum,” Grenholm said in a video interview with CNBC on Thursday. (She used the same metaphor at a conference earlier this year to describe the contradiction between pursuing a green energy policy and asking oil and gas companies to increase their production to counter rising pump prices.)

Granholm knows that there is skepticism in carbon capture technologies. Critics say it is mostly used by industries that pollute the environment as a way to postpone necessary work to reduce emissions.

“There is criticism that something like this – carbon sequestration and sequestration – just prolongs the assets that fossils [fuel] the industry will use it, “said Granholm.” I will say this: all we can do for decarbonization is good. “

In particular, carbon capture technologies will be important to compensate for industries that are difficult to decarbonize, such as heavy industry and steel and cement production, she said.

She also said that fossil fuels will become part of the world’s energy infrastructure for some time.

“We have a goal of zero clean fuel by 2050. And you know, the IPCC has stated that fossil fuels will be used during this transition, ”Granholm said. “So we have to start in these technologies.”

Carbon capture technology is at an early stage and remains quite expensive.

The Department of Energy is committed to helping reduce the cost of carbon removal technologies as part of its Carbon Negative Shot, or Earthshot. Earthshot’s goal is to be able to remove gigatons of carbon dioxide from the atmosphere and store it for less than $ 100 per tonne by 2050.

“The advantage of the Minister of Energy is that I can see what 17 national laboratories are working on,” she said. “And it makes me extremely optimistic about the future, because technology will eventually be our friend in solving this big problem.”

But in order for carbon capture technology to really grow and scale, some investors believe there should be a price for carbon.

The closest the United States has to a financial stimulus is a tax credit called 45Q, which offers up to $ 35 per tonne of carbon dioxide or carbon monoxide stored under oil production projects, and up to $ 50 per tonne for gas . if they are stored in geological formations outside EOP projects.

At the moment, Granholm is pleased to be counting on the private sector to help create this market.

“In America, we have historically allowed the free market to make these decisions, but other countries are cooperating or intervening with their state-owned enterprises and their subsidies and saying we are going to take control as a government and make sure we make us more competitive. This is what China is doing. Other countries are doing it. Well, we don’t do that in America, ”she said.

“But what we’re doing is building a public-private partnership and investing in technology at an early stage to help reduce these costs at the expense of scale.”

Why the Fed spends $ 2.5 billion on carbon capture

Source link Why the Fed spends $ 2.5 billion on carbon capture

Back to top button