Hoeven Leads Bipartisan, Bicameral Group in Pressing to Modernize Tax Credit to Help Advance the Use of CCS Technology

Senator Worked with Energy Stakeholders to Craft Solution, Ensure Standards Are Technically & Economically Feasible for CCS Retrofit Projects

WASHINGTON – Senator John Hoeven this week led a bipartisan group of Senators and Congressmen in urging the leaders of the Senate Finance Committee and the House Ways and Means Committee to include a provision in upcoming legislation supporting the use of carbon capture and sequestration (CCS) technology.

“Our energy industry is constantly innovating and developing the technologies that will ensure America’s energy security while also improving environmental stewardship,” said Hoeven. “We need to make sure that the standards we put in place actually accomplish the goal of reducing emissions. The Section 48A tax credit currently imposes requirements that don’t reflect the technical and commercial realities of using CCS technology. We’ve worked to craft a legislative solution and are pressing for its inclusion in end-of-the-year tax legislation. Doing so will support the adoption of this technology and enable us to realize its full potential.”

“Basin Electric appreciates Senator Hoeven’s leadership in supporting improvements to the 48A tax credit for advanced coal projects. This incentive is important to help the utility industry continue implementing solutions to reduce emissions from coal-based power plants and explore future options to keep coal in the generation mix as a reliable and affordable fuel source,” said Paul Sukut, CEO and General Manager of Basin Electric.   

“The 300 members of the Lignite Energy Council appreciate the support demonstrated by North Dakota’s Congressional Delegation to both modify and extend an important tax incentive that will help boost clean coal technology. We are deeply committed to advanced generation technologies, in terms of dollars, time and resources. The 48A tax credit is one more arrow in our quiver as we bridge from traditional generation systems to advanced systems that are more efficient and increasingly clean.” said Jason Bohrer, President and CEO of the Lignite Energy Council. 

“Thank you to Senator Hoeven for his efforts on putting together this notable letter, it’s both bi-partisan with key policymakers as signatories. Making small changes to section 48A can really have a big impact to spur the development of carbon capture retrofit projects across the country, including Project Tundra. Thank you to Senator Hoeven and each of the co-signers for their leadership on this issue,” said Mac McLennan, President and CEO of Minnkota Power.

Hoeven has been working with energy stakeholders to address the efficiency and performance standards under the Section 48A tax credit, which incentivizes investment in clean coal facilities. The tax credit was first established in 2005, and CO2 capture projects were made eligible in 2008. However, the eligibility standards for the credit are not technically or economically feasible for CCS retrofit projects, like Project Tundra. Accordingly, Hoeven and his colleagues are pressing for reforms to the standards that reflect the capabilities of existing technology, which will help promote the adoption of CCS technology and reduce emissions. 

In addition to Hoeven, the letter was signed by Senators Heidi Heitkamp (D-N.D.), John Barrasso (R-Wyo.), Joe Manchin (D-W.Va.), Steve Daines (R-Mont.), Tina Smith (D-Minn.), Mike Enzi (R-Wyo.), Jon Tester (D-Mont.) and Lindsey Graham (R-S.C.), as well as Congressmen Kevin Cramer (R-N.D.), David McKinley (R-W.Va.) and Greg Gianforte (R-Mont.). The full text of the group’s letter can be found here.

Today’s effort dovetails with Hoeven’s CO2 Regulatory Certainty Act, which would ensure developers of CCS projects can use the Section 45Q tax credit, as well as his legislation to extend the Section 45 refined coal tax credit. Further, it builds on his efforts as a member of the Senate Energy and Water Development Appropriations Committee. Through this role, Hoeven secured the following priorities in the Fiscal Year 2019 funding legislation that was recently signed into law:

  • $30 million to support the development of commercial-scale carbon capture technology to be retrofitted on an existing power plant, funding for which the next phase of Project Tundra would be eligible.
  • $25 million to develop supercritical CO2 technologies for coal and natural gas plants like the Allam Cycle.
  • Increased funding for the U.S. Department of Energy’s (DOE) carbon capture and storage research programs.
  • A provision supporting DOE’s cooperative agreements with institutions like the Energy and Environmental Research Center (EERC) at the University of North Dakota.