Donald Trump’s return to the White House could scramble the evolution of carbon capture and storage — but the technology will likely still find its way into the power sector.
Generous tax credits from the Inflation Reduction Act have already prompted a boom in planned projects to capture emissions from power plants. And while Trump will likely ditch national climate targets — as well as an EPA rule to limit power plant emissions — utilities will still need to meet corporate, state and local climate goals.
Carbon capture advocates and energy experts say those forces — paired with utilities looking to keep open fossil fuel plants to meet increasing energy demand — mean CCS could still grow in the power sector, regardless of how Trump handles the technology.
“CCS is a deployable solution to address that demand for decarbonized power,” said Jarad Daniels, CEO of the Global CCS Institute think tank, in a statement. “We are optimistic that CCS will continue to be viewed as a key part of an ‘all of the above’ strategy to meet U.S. energy goals and for U.S. businesses to remain economically competitive in an increasingly global low-carbon world.”
The Biden administration has poured billions of dollars into the carbon capture industry as part of its efforts to cut U.S. emissions, despite concerns from some environmentalists that the technology acts as a crutch to delay the transition to renewable energy. President Joe Biden’s landmark climate law — the Inflation Reduction Act — included a big boost to the 45Q tax credit for every metric ton of stored carbon dioxide.
While Trump has promised to repeal parts of that law, CCS — and the incentives that help projects pencil out economically — enjoys bipartisan support in Congress. The Department of Energy has also announced plans to invest up to $1.3 billion from the 2021 bipartisan infrastructure law in carbon capture projects, including on power plants and industrial facilities.
“Reading the tea leaves on what the Trump DOE will do is always a little challenging, but historically carbon capture has … received support from both sides of the aisle,” said Ben King, associate director with Rhodium Group’s energy and climate practice. That makes it more likely that the agency will keep various pilot and demonstration projects moving forward, he said.
One drag for the industry may be the expected repeal of EPA’s 2024 rule to limit power plant pollution, meant as a stick to the tax credit’s carrot.
The rule effectively requires any coal plants scheduled to run beyond 2039 to install carbon capture systems by the start of 2032. While the rule doesn’t apply to existing gas plants — which make up more than 40 percent of the U.S. electricity mix today — it would require carbon capture systems on future gas plants that provide baseload power.
Trump has pledged to undo the rule. But experts said that even with it, the cost of installing CCS needs to decrease in order for the technology to play a greater role in the power sector.
“I think the power plant rule does have the potential to drive CCS, but I would say probably more important is the economics of CCS and there the most important thing is the 45Q tax credit,” said Aaron Bergman, a fellow at nonprofit research group Resources for the Future.
Currently, there’s only one commercial-scale carbon capture project on a U.S. power plant — the Petra Nova facility in Texas — though 20 CCS projects in the power sector are in advanced development, according to a recent report from the Global CCS Institute.
While a change in administration “adds policy uncertainty” to the U.S. power sector, Daniels said, some CCS projects have benefited from DOE funding, while others are buoyed by state climate targets.
“While not every project may successfully advance to construction, ambition to decarbonize the power sector persists in places like California, which has set the goal of achieving carbon neutrality by 2045,” he said.
Others cautioned that even if Trump acts to repeal EPA’s power plant rules as expected, the process to undo them would take time.
“I think the important point is to realize that Trump cannot just undo a final rule with the stroke of a pen on Day 1, and that there is going to be a lengthy and contentious process if the administration does move to repeal the rule, as they’ve signaled they will,” said Gudrun Thompson, senior attorney and energy program leader at the Southern Environmental Law Center.
Market forces
The power sector has been relatively slow to adopt carbon capture, in large part because of the hefty upfront cost and the complications in transporting and storing the captured carbon.
But many utilities still need to meet corporate, state and local mandates to decarbonize. Capturing emissions from baseload fossil fuel plants may be their best option for ensuring the lights stay on when demand outstrips what a renewable-heavy grid can provide.
With fossil fuels currently making up 60 percent of the U.S. electricity mix, carbon capture and removal technologies “will play an essential role” in addressing emissions from existing U.S. power plants, said Jessie Stolark, executive director of the Carbon Capture Coalition, a group that advocates for commercial-scale deployment of carbon capture and removal.
“Regardless of the fate of these rules, project developers are moving forward with deploying these critical technologies,” Stolark said. She pointed to “leading indicators,” such as an uptick in announced projects and applications to build Class VI wells, which are used to send carbon dioxide into underground formations.
PacifiCorp, for example, said last year that it hoped to extend the life of coal plants it had previously planned to retire with carbon capture. Calpine is investigating installing the technology on gas plants in Texas and California, while Duke Energy is exploring CCS for an Indiana power plant.
The Biden EPA rule builds on those market forces.
But EPA’s own modeling suggests that coal plants are going to be quick to retire regardless of the regulations and that CCS may do little for the coal sector. EPA modeling predicts that 19,000 MW of coal-fired capacity will operate with CCS past 2040 under the rule, compared to roughly 11,000 MW without it.
Overall, EPA expects that of the 180,000 MW of coal plants active today, only 42,000 MW would be active in 2040 even without the rule. With the rule, that number falls to 28,000 MW.
“There are probably a handful of plants where carbon capture is a worthwhile path forward,” said Brendan Pierpont, director of electricity modeling at Energy Innovation. “Most of these plants are older and have reliability challenges to overcome or face fuel costs that prevent them from being a wise economic decision.”
AJune analysis of the EPA rule from Rhodium Group said fossil fuel power plants with CCS “generally plays a small role on the grid in 2035,” with “almost all coal plants” retiring in the early 2030s rather than doing a carbon capture retrofit.
The first Trump administration’s efforts to keep coal thriving in the power sector were largely unsuccessful because of the economic forces bearing down on the industry. A record number of coal plants closed — and coal’s share on the market plummeted — during Trump’s first term despite a reworked emissions standard for power plants meant to be more friendly to fossil fuels.
Doug Vine, director of energy analysis at the environmental nonprofit Center for Climate and Energy Solutions, said that while EPA’s power plant rule identified carbon capture as a best system of emission reduction, emission cuts could be achieved through other means.
“It’s just kind of setting the benchmark for the amount of emissions that need to be achieved,” Vine said, adding, “so there was never really any guarantee in the rule that [carbon capture, utilization and storage] would be used necessarily, or that that would be the choice that utilities would make.”
Some utilities have expressed concerns about the timelines included in the rule, while others have noted geographic constraints, like the southeastern United States lacking proximate access to geologic storage for CO2, Vine said.
But utilities that were considering CCS likely still are, he said.
The importance of 45Q
Utilities contacted by POLITICO’s E&E News said it is still too early to say whether the change in administration will change their CCS plans. Edison Electric Institute spokesperson Sarah Durdaller said that the trade group and its members are “strongly supportive of CCS technology and are working to demonstrate and deploy it at scale.”
But EEI, along with several large members, sued the EPA over the power plant rule in part because they said CCS was not mature enough to be the basis for compliance. Oral arguments took place Friday, though the case’s future is unclear as the Trump administration is unlikely to defend the rule.
“We have consistently noted that this technology has yet to be adequately demonstrated as required by the Clean Air Act,” said Durdaller in an email. “We will continue to focus on policy solutions that drive innovation and that allow electric companies to deliver reliable, affordable, and resilient clean energy to all customers.”
Some companies that oppose EPA’s rule are actively pursuing CCS technology. Developers of a proposed project in North Dakota — known as Project Tundra — aim to equip a coal-fired power plant with carbon capture.
“We oppose the EPA’s greenhouse gas rule for power plants and are engaged in legal efforts to challenge its implementation,” said Ben Fladhammer, a spokesperson for the Minnkota Power Cooperative, an electric generation and transmission cooperative. “This rule is unworkable, posing serious threats to the reliability and affordability of the nation’s electric grid.”
The cooperative has punted a final investment decision for Project Tundra into 2025, marking only the latest delay in the effort.
The project benefits from DOE backing.
DOE’s Office of Clean Energy Demonstrations, established under the 2021 infrastructure law, has announced millions of dollars in awards for CCS projects in the power sector, including for engineering and design studies, site evaluations and community benefits planning.
Projects that have received DOE investment are more likely to advance, said King of the Rhodium Group.
Also important for the future of CCS is whether Congress alters the 45Q tax credit when it passes a tax bill in the coming year, according to Bergman at Resources for the Future. The tax credit, created by Congress in 2008, has been revamped substantially in recent years: once by Trump via the Bipartisan Budget Act of 2018 and again in 2022 through Biden’s Inflation Reduction Act.
Developers can now claim up to $85 per metric ton of CO2 sequestered in saline or other geologic formations and up to $60 per metric ton of CO2 stored via enhanced oil recovery or embedded in a product.
“In some analyses, that does make retrofitting some existing coal plants economic, so there may be a case for utilities to do this just so that they can receive the value of the tax credit, because it is so generous,” Bergman said.
