Strangely, much of the focus of carbon policy has been on reducing the amount of carbon generated, with little attention paid to carbon capture, utilization and storage .
But it does so in a very concentrated way, as the cement is cooked in giant kilns that lends itself to carbon capture.
Worldwide, coal-fired power plants generated about 30 per cent of total CO2 emissions in 2018, so capturing most of that carbon would make a big dent in total emissions.
In order to enable and encourage commercial CCUS, government mechanisms need to provide incentives for entrepreneurs to do what they do best: innovate.
That does not mean picking winners and losers or favouring particular industry players.
For instance, although an investment tax credit for capital invested in CCUS projects is in the works for 2022, its implementation needs to minimize market distortions.
What about a tax credit based on performance? A potential model is the U.S.’s performance-based “Section 45Q Tax Credit,” which offers eligible facilities and projects a tax credit for each metric ton of carbon captured, provided a number of conditions are met.
That said, it is more important than ever to recognize the immense potential of CCUS technologies and to foster a robust, self-sustaining market for them.