Globally: Necessity of Incentives for Large-scale CCS
For countries to achieve ambitious emissions reduction goals, there needs to be accelerated progress in the commercial-scale deployment of carbon capture, utilization, and storage (CCUS/CCS) across a wide variety of applications. CCS incentives are a key answer to this challenge. Government mechanisms are needed to enable commercial CCS which could include a range of complimentary options such as certainty in CO2 value, a level playing field with alternative low-carbon technologies, and front-end development support to drive down costs and make capital investment competitive.
Already governments around the world are employing a range of policy tools and incentives including tax credits and direct government grants to address roadblocks and challenges to promote CCS projects. In the US, the expanded 45Q tax credit is regarded by many as a game-changer and is the primary reason for the significant increase in CCS deployment; while the European Union focuses more on direct government grants, including preferential loans rather than tax credits. In Canada avenues such as tax incentives, value streams, and business cases to support successful deployment are all being considered.