Carbon Capture Credit Grabs Bipartisan Support
WASHINGTON — Sens. Michael Crapo, R-Idaho, and Sheldon Whitehouse, D-R.I., proposed legislation on Thursday that would grant tax credits to energy companies innovating carbon capture or energy storage tech.
The legislation, entitled the “Energy Sector Innovation Credit Act of 2021,” would establish investment credits for qualified emerging energy properties utilizing or developing pollution abatement technology.
“It is difficult for innovative technologies to move into a mature market, especially large infrastructure projects,” Breakthrough Institute Senior Nuclear Analyst Adam Stein said in a written statement. “The ESIC Act targets support for these innovative and early-stage clean energy technologies that are critical to modernize our energy infrastructure, including nuclear energy.”
The proposed tax credits are targeted towards up-and-coming companies to fortify and expand clean energy pioneers in the sector. Additionally, the investments aim to strengthen the technological underpinnings of the power grid by providing reliable energy that safeguards the environment.
The credits seek to encourage emerging companies in the sector to develop pollution abatement technology to accomplish long-term emissions targets while stimulating job growth.
Stein continued in support of the legislation, “Specifically, the ESIC Act will diversify and increase the U.S.’s energy generation portfolio and security by providing tax credits to new and emerging clean energy technologies. The flexible design allows developers to choose the tax credit options that best fit their technology and business model. Importantly, by promoting private sector innovation in clean energy technology, public and private sector market participation will invest in the U.S.’s capability to lead the world in clean energy innovation.”
Provisions of the bill categorize ESIC qualifiers in groups based on input from government agencies, stakeholders, and nonprofits. The credit amounts are awarded based on companies’ total sales volume compared to the total market of all technologies within each categorical group.
The act is co-sponsored by Sens. John Barasso, R-Wyo., Michael Bennet, D-Colo., James Risch, R-Idaho, and John Hickenlooper, D-Colo. Its companion legislation in the House is being carried by Reps. Tom Reed, R-N.Y., and Jimmy Panetta, D-Calif.
“With new tax credits for clean energy technologies at an early development stage, this bill expedites the decarbonization of our power grid,” Stein continued in his written statement. “These subsidies are most effective not only as a standalone decarbonization policy but as a temporary tool in technology innovation policy. As the Breakthrough Institute noted in a recent report, federal tax resources are limited, it is critical that incentives are directed at early-stage technologies that contribute to a clean energy system including offshore wind, enhanced geothermal, advanced nuclear, and carbon removal.”
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