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Carbon Capture Use and Storage (CCUS) to see wide scale deployment in California

Impact of the ’Triple Incentive’ of 45Q, CaT, & LCFS (Low Carbon Fuels Standard) in driving interest in California

Cupertino, CA – WEBWIRE (CCI) has published an InSights report entitled Carbon Capture Use and Storage in WCI markets. Many believe Carbon Capture Use and Storage (CCUS) will play a huge role in reducing global carbon emissions, but there have long been question marks concerning its financial viability. This report analyses why California may prove to be one of the first locales to see wide-scale CCUS deployment, namely because of the three different incentive programmes available for CCUS in California: the LCFS, Cap-and-Trade, and the 45 Q tax credit. On this basis, posits a triple incentive for investment, and so argues that viability is not reliant on any one of the incentive programmes.

The insights within the report are grounded in CCI’s own forecasting models for emissions in different sectors, and for allowance prices within the Cap-and-Trade and the LCFS markets. It combines these predictions with the views and experiences of insiders within the field to fully analyse the present and future viability of CCUS deployment in California.

The report evaluates a number of different sectors: including refineries, oil and gas production, natural gas Combined Cycle plants, cement, fertilizer, natural gas processing and biomass to ethanol. The report evaluates which sectors will be viable, and crucially, over which time periods do the rising financial incentives of CCUS cross through its falling deployment costs.

To learn more:


Table of Contents
1            Introduction      
              CCUS Recap   
1.1         Current global state-of-play of CCUS     
2            CCUS development in California 
3            Incentive programs to aid CCUS in California 
3.1         Low Carbon Fuel Standard (LCFS)
3.2         Cap-and-Trade  
3.3         45 Q tax credit  
4            The Business Case for CCUS       
5            Californian Potential      
5.1         Key emitters in 2019 by sector   
6            Sectoral costs of CCUS   
6.1         The Incentive landscape 
6.2         Impact of the incentives 
6.2.1     Variations in Cap-and-Trade Prices and impact on incentives / cost savings available for deploying CCUS     
6.2.2     Variations in Project Type and 45Q tax credit on incentives / cost savings available for deploying CCUS     
6.2.3     Low Carbon Fuel Standard          
6.3         Maximum vs. Minimum Incentives for EOR and Geologic storage 
7            Timeline vs. Sectoral Cost of Deployment of CCUS            
8            Glossary             
9            About       

List of Figures
Figure 1  Global CCS facilities in various stages of development. Source: Global CCS Institute, Is CCS expensive?
Figure 2  Historical LCFS pricing (2016-present). Source: ARB
Figure 3  California Carbon Allowance price in Aug-Sept 2020
Figure 4  Forecasted California Carbon Allowance floor price to 2030
Figure 5  2019 and 2030 emissions of CCS relevant sectors
Figure 6  Percentage share of CCUS relevant sector emissions based on 2019 emissions
Figure 7  Top five emitters in 2019 under oil and gas
Figure 8  Top five emitters in 2019 under refineries and hydrogen
Figure 9  Top five emitters in 2019 under cement manufacturing
Figure 10  Top five emitters in 2019 under fossil fuel electricity generation
Figure 11  Sectoral cost of CCUS. Source: Global CCS Institute, Is CCS expensive?
Figure 12  Cap-and-Trade (CaT) price scenarios until 2030 with LCFS mid-case and 45Q tax credit for EOR
Figure 13  45Q tax credit projected to 2030 with likely case Cap-and-Trade (CaT) and LCFS mid-case
Figure 14  LCFS credit forecast and estimated “haircut” cost to eligible facilities
Figure 15  LCFS scenarios w/ Cap-and-Trade (CaT) likely case and 45Q tax credit (EOR)
Figure 16  Maximum and minimum incentives available under Cap-and-Trade scenarios
Figure 17  Timeline of economic viability of sectoral CCUS applications
Figure 18  Project development process. Global CCS Institute
Figure 19  CCS readiness indicator. Global CCS Institute

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