Carbon Capture Could Get $100 Billion in Credit from US Climate Bill
Comment of the Day

August 16 2022

Commentary by Eoin Treacy

Carbon Capture Could Get $100 Billion in Credit from US Climate Bill

This report from Bloomberg New Energy may be of interest to subscribers. Here is a section:

The new legislation raises the credits for captured CO2 that is used and stored to $60/tCO2 and $85/tCO2 respectively. However, project owners must meet prevailing wage and apprenticeship requirements in order to qualify. If they do not, they will be paid a lower credit than the existing 45Q payment. Projects must be under construction by the end of 2032 to receive the credit

A new, much higher credit is available to direct air capture (DAC) projects. DAC currently costs around $600/tCO2. The credit pays $130/tCO2 for gas that is used, say, for enhanced oil recovery or to make synthetic fuels, and $180/tCO2 for CO2 that is stored permanently.


Eoin Treacy's view

Here is a link to the full report. 

Regulatory arbitrage will ensure that some areas will continue to benefit from having less strict regulations than either North America or Europe. Meanwhile there is little to be gained from arguing about the sense behind carbon credit trading. We can only deal with the reality provided by the market. The regulatory regime continues to support taxes on emissions.

The EU’s carbon credit futures are firming within the range that has forming over the last five months. That’s in recognition of the fact much of the continent will be burning more coal this winter.

The major oil companies like Exxon Mobil are the leaders in capturing carbon from their operations. Pureplays from an investment perspective include; Aker Carbon Capture, California Resources Corp, Archaea Energy and Calix Ltd.
Of these California Resources has the most constructive chart pattern..

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