Product Summary

CCUS BUSINESS MODELS IN THE PCOR PARTNERSHIP REGION

To incentivize dedicated CCUS where a market does not exist, the U.S. government has established a tax credit program for storing CO₂. The value of these tax credits drives a business case forward to enable the realization of CCUS projects. Some CCUS projects, like those associated with ethanol plants, can bolster their business case for CCUS by capitalizing on increased commodity values (higher value per gallon of ethanol). Leveraging low-carbon fuel standards, like those established by the California Air Resources Board (CARB), can provide direct financial gain to an ethanol company implementing CCUS. In fact, the ethanol company can stack the financial benefits of increased commodity prices and the tax credits gained from the U.S. government. This combination is the driver for two recently announced projects for large-scale gathering and transport of CO₂ from ethanol plants in the United States. In Canada, the federal government has put a price on CO₂ emissions (currently Can$30/tonne). Under this situation, there may be financial benefit to capture and store the CO2 rather than pay the tax. This potential financial benefit would be a business driver for CCUS. Specific examples include the updates to the U.S. Section 45Q federal tax credits, which have improved the economics of potential CCUS projects, and the planned Canadian investment tax credit program and carbon-pricing framework. In addition, the recent U.S. Environmental Protection Agency approval of primacy applications by North Dakota and Wyoming for underground injection control Class VI regulations (wells used for geologic storage of CO₂) have provided potential CCUS project developers with the additional regulatory certainty needed to invest in commercial-scale CCUS projects.