Since US President Joseph Biden took office in January, Democrats and Republicans have gone back and forth on almost every piece of legislation. The new budget bill has been no exception. However, sources say top Democratic lawmakers have finally reached an agreement that includes increasing tax credits for industrial carbon capture projects.
If implemented, this agreement would expand the 45-Q tax credit for carbon capture projects in heavy industries, such as cement and steel, to $85 per metric ton. Currently, the credit varies from just under $12 to $50 per ton.
This agreement does not cover coal and natural gas, a significant source of US carbon emissions. However, Senator Joe Manchin of West Virginia is pushing for coal and natural gas to be included. Doing so would help boost his state’s economy while improving the environment.
Since Senator Manchin is a right-leaning Democrat, his vote is key to the budget bill’s passage.
US Representative Cheri Bustos, a Democrat who has sponsored carbon capture legislation, said that raising the credit “Would drastically increase our carbon capture capacity by 2035 and create tens of thousands of new jobs.”
Many of these new jobs would be within ethanol and manufacturing plants that are in rural locations. Since many workers across more rural states feel left behind, a bill such as this could positively impact communities.
The carbon credit industry is expected to reach $22 trillion by 2050. This year alone, it has expanded as governments, companies, investors, and individuals recognize its potential to offset carbon and spark economic development.
The US is the second-largest greenhouse gas emitter globally, just behind China and before India, so action is needed. Biden has expressed that the US is committed to meeting emissions goals by rejoining the Paris Agreement.
Additional regulations, the carbon credit and offset industry, and innovative technological advances all have a role to play. Combating climate change was a significant campaign promise, and many feel Biden hasn’t delivered.