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Carbon capture might be EPA’s strongest tool to cut emissions from power plants. That could scramble battle lines.
Carbon capture, one of the most controversial climate solutions, could soon become a centerpiece of U.S. climate policy.
The Environmental Protection Agency is expected to finally unveil its proposal to cut emissions from power plants next week. In the lead up to the announcement, The New York Times reported that the agency is planning to set greenhouse gas emission limits for new and existing power plants based on the reductions that could be achieved by installing equipment to catch emissions from plant smokestacks before they enter the atmosphere.
The funny thing is, whether you see promise in carbon capture or deem it a boondoggle, this is probably the most aggressive approach the EPA can take for power plants. It could even speed up the transition to renewable energy. And for that reason, it’s going to put both proponents and critics of the technology in a weird position, scrambling the usual battle lines on the subject.
Due to the Supreme Court’s ruling in last year’s West Virginia vs. EPA case, the agency’s legal avenues for reducing emissions from the power sector are limited. It can’t force utilities to shut down their fossil fuel power plants and switch to renewables. Instead, it must stick to reductions that can be achieved “within the fenceline” of a power plant.
That leaves a few options. The agency could base its rule on improvements to power plant efficiency. It could look to the potential for coal plants to co-fire with gas or for gas plants to burn hydrogen. But neither would reduce emissions as much as a rule based on carbon capture, Lissa Lynch, a senior attorney at the Natural Resources Defense Council told me in an email. And the Inflation Reduction Act, which contained huge tax credits for carbon capture, makes it possible for the agency to argue that carbon capture is an economically feasible solution, as my colleague Robinson Meyer has reported.
Here’s the twist: That doesn’t mean that every plant would have to install carbon capture. States would have the authority to create their own implementation plans to comply with the standard, and a range of options for how to do it. They might choose to shut down some power plants and replace them with renewables, or operate plants less frequently. But since renewables are so cheap, shifting to solar, wind, and batteries may be the more common response than investing in carbon capture.
The research firm Rhodium Group recently modeled the potential emission reductions from carbon capture-based power plant rule, taking into account new tax credits from the Inflation Reduction Act, and found that only about 20 gigawatts’ worth of coal and gas plants would end up installing carbon capture by 2035. By comparison, some 700 gigawatts of coal and gas plants operate today.
Over the past few years, under increased pressure from investors to show what they are doing about climate change, the oil and gas industry has ramped up its advocacy for carbon capture. Many fossil fuel producers and electric utilities now have net-zero plans that rely heavily on the technology. In 2021, ExxonMobil announced plans to work with 15 other companies to develop a $100 billion carbon capture hub in Houston. DTE, a Michigan utility that owns power plants in California, may have even engineered an entire dark money campaign to convince California regulators to make carbon capture part of the state’s climate plan.
In the American Petroleum Institute’s 2021 Climate Action Framework, the lobbying group said one of its goals was to “Fast-track the Commercial Deployment of Carbon Capture, Utilization and Storage,” and wrote that it “supports federal policies to achieve the ‘at-scale phase’ of CCUS commercial deployment.” (CCUS stands for carbon capture, utilization, and storage.)
On social media, API paints carbon capture as a present-day solution. “Advancements in carbon capture technology from the brightest minds in the energy industry are slashing emissions and creating a cleaner future,” it recently tweeted.
\u201cAdvancements in carbon capture technology from the brightest minds in the energy industry are slashing emissions and creating a cleaner future.\u201d— American Petroleum Institute (@American Petroleum Institute) 1680725045
At the same time, large swaths of the environmental community have joined together to oppose the technology. In July 2021, more than 500 organizations signed on to a letter to U.S. leaders in Washington arguing that carbon capture is not a climate solution. “Simply put, technological carbon capture is a dangerous distraction,” the groups wrote. “We don’t need to fix fossil fuels, we need to ditch them.” Many, many environmental groups have published treatises on why carbon capture is unproven, too expensive, harms communities, and prolongs dependence on fossil fuels.
But as the new power plant regulations loom, proponents of carbon capture have started to temper their enthusiasm, citing some of those same concerns.
In comments submitted to the EPA in March, the American Petroleum Institute’s vice president of natural gas markets, Dustin Meyer, only mentions the technology as an afterthought, underscoring that it isn’t viable yet. After a long section highlighting the benefits of switching from coal to natural gas for power generation, he writes, “In the future ... new technologies like CCUS can offer additional opportunities to reduce emissions.” The American Petroleum Institute declined to comment for this story.
Southern Company, which owns gas and electric utilities across six states, submitted extensive comments to the EPA arguing that carbon capture was “many years away.” The company manages and operates the National Carbon Capture Center, where it conducts research on the technology. Its climate plan suggests that some 21% of its electricity generation will come from natural gas plants with carbon capture by 2050. And it’s in the process of conducting an engineering study to install the technology on one of its natural gas plants in Alabama.
But carbon capture isn’t ready for commercial deployment, Southern writes, using an example that’s often cited by critics of the technology — Petra Nova. Petra Nova is a carbon capture project at a coal-fired power plant in Texas that was mothballed in 2020 when it lost buyers for the captured carbon. While it operated, it experienced frequent outages and failed to capture the amount of carbon it was designed to. Its failure, Southern writes, illustrates that more research is needed to reduce the cost of carbon capture and improve reliability and performance, “which are critical when facilities are required to meet regulatory emission limits.”
Meanwhile, some of the loudest proponents of carbon capture in the upcoming EPA regulations have been environmental groups like the Natural Resources Defense Council, Evergreen Action, and the Clean Air Task Force. This isn’t exactly surprising. These groups, in particular, have historically been supportive of carbon capture technology.
“Industry has been touting the promise of carbon capture and storage for decades,” Lynch of the Natural Resources Defense Council told me. “It hasn’t been widely deployed on power plants because there currently aren’t any federal restrictions on the amount of carbon pollution that power plants can emit.”
Jay Duffy, litigation director at Clean Air Task Force, said the industry’s claims are unfounded. He cited studies by the Department of Energy’s National Energy Technology Laboratory which show that carbon capture is economical, when considering the new tax credits in the Inflation Reduction Act. There are already 13 vendors offering the technology for gas-fired power plants, he said.
Moving forward, some of carbon capture’s biggest critics might find that they need to support a carbon capture-based standard. The Center for Biological Diversity submitted comments to the EPA criticizing the technology, but did not suggest an alternative basis for the rule. When I asked Jason Rylander, legal director for the organization’s Climate Law Institute, whether they would support a standard based on carbon capture, he didn’t say no.
“The big problem is that the existing fossil fuel fleet is essentially uncontrolled for climate pollution in the middle of a climate crisis,” he told me. “That has to stop.”
Rylander couldn’t say where his organization would come down on the rule without seeing it, but he said that if it was based on carbon capture, there would have to be “extremely strong guardrails to ensure the safety and performance of the equipment.” But he also acknowledged that the EPA’s increasingly tough regulatory environment for power plants, along with tax incentives for clean energy in the Inflation Reduction Act, could mean that very little carbon capture would ultimately get built.
“It may very well be that the majority of plants meet these standards by other means.”
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A little-noticed provision would make the payment option used by tax-exempt groups all but impossible to claim.
A little-noticed provision in the Senate tax bill will sabotage the efforts of tribes, rural electric cooperatives, and public power authorities to develop local affordable energy projects by striking a section of the Inflation Reduction Act that enabled tax-exempt groups to claim the clean energy tax credits as direct cash payments from the Treasury.
The IRA included strict domestic sourcing requirements beginning in 2026 for groups utilizing this “direct pay” option. But the law also created exceptions for cases where domestic components were not available in sufficient quantity or quality, or would increase costs by more than 25%. The Senate bill would get rid of these exceptions.
“It just makes it unlikely for those projects to go forward — or more likely for those projects to go forward with a private developer, instead of with a public utility or a tribe or a rural co-op,” Grace Henley, a tax attorney with the Natural Resources Defense Council, told me. “And so they don’t really do anything to increase the amount of domestic material that would be used, they just hurt the projects that are seeking to invest in clean energy infrastructure for these communities to lower costs.”
Public power and tribal energy advocates warn that without the exceptions, energy development will become impossible for their constituents.
Wind and solar projects being developed by these groups are already threatened by the bill’s rapid phase-out of wind and solar tax credits and its complex rules related to using materials from China. Chèri Smith, the executive director of the Alliance for Tribal Energy, told me that Tribes face longer development timelines than the average private developer. “We have multiple stages of approval that are unique to tribal energy development,” she told me, including lengthy internal consultation processes. The changes to direct pay will put these projects further out of reach, she said.
The Alliance provides free energy development consulting services to more than 100 Tribes. Smith sent me a list of projects in Alaska Native villages, Arizona, California, and Oregon that could be killed by the tax credit changes. “Alaska Native villages face some of the highest energy costs in the country,” she said, largely due to their reliance on diesel generators. Just over a third of the Hopi Tribe in Arizona lacks access to electricity, but now multiple microgrid projects meant to close the gap are at risk. Many of the projects on the list are also doubly threatened by grant cancellations and the repeal of the Tribal Energy Loan Guarantee Program.
“The bill is particularly harmful to Tribal Nations, pulling the rug out from under projects that would strengthen their energy sovereignty and power local communities,” Democratic Senators Martin Heinrich, Ron Wyden, and Brian Schatz wrote in a joint statement on Thursday. “Together, the Tribal Energy Loan Guarantee Program and our Inflation Reduction Act’s clean energy tax credits have cleared pathways and removed significant barriers for Tribes to finance and build their own resilient energy infrastructure.”
The American Public Power Association is also sounding the alarm. John Godfrey, the group’s senior government relations director, told me that in addition to wind and solar, municipal utilities and rural electric co-ops are also considering nuclear and hydropower projects. For example, Energy Northwest, a consortium of 29 public utilities in Washington State, has plans to retrofit the Columbia Generating Station nuclear plant to increase its power output. It’s also in early stages to deploy four small, modular nuclear reactors. As my colleague Matthew Zeitlin wrote a few days ago, the governor of New York has also tasked the New York Power Authority with developing a new nuclear plant in the state.
Nuclear and hydropower “are technologies where often there is not a U.S. source, but there is a good trading partner source — Canada, Germany, Japan,” Godfrey said. By tightening the domestic sourcing requirements for direct pay, the bill would “hinder the very technologies that there’s generally a bipartisan consensus we need to be developing.”
Public utilities and electric co-ops, which serve close to 30% of electric customers in the U.S., are also unfairly singled out by the provision, he said. “If my public power utility wants to develop a project and they need a Canadian turbine, they can’t get any credit. But if a taxable corporation down the street develops exactly the same project, they can.”
“If the purpose is to encourage hydropower, that’s not a good use of resources,” he said.
Senate Republicans tucked a carveout into their reconciliation bill that would allow at least one lucky renewable energy project to qualify for a major Inflation Reduction Act tax credit even after the law is all but repealed.
The only problem is, it’s near impossible to be sure right now who may actually benefit from this giveaway — and the mystery is driving me up the wall. I feel like Charlie Day in that episode of It’s Always Sunny in Philadelphia, stringing documents together and ranting like a lunatic.
The Senate bill would phase out the tech-neutral production tax credit starting next year and completely eliminate it by the start of 2028. For the past week and a half, I have been trying to solve the riddle of an exemption tucked into the language that would allow a wind or solar facility that is “part of a single project” to continue to take advantage of the tech-neutral production tax credit as it exists today, which means it would not begin to phase out until 2034.
To qualify for the exemption a project must, according to the Senate text, meet two conditions: It must produce more than 1 gigawatt of electricity, and be sited on federal lands where a “right-of-way grant or lease” had been given by the Bureau of Land Managementbefore June 16, which is the date the text was released.
Only a handful of projects in the U.S. could possibly fit that criteria. But every time I think I’ve identified one that will actually qualify, I learn a new fact that, to me, takes it out of the running.
Here’s why my head hurts so much: A renewables facility that would benefit from this language needs to be sited at least partially on federal lands. But because Trump isn’t issuing new right-of-way approvals or leases to most renewables projects right now, it likely had to get its right-of-way or its lease before he entered office. (The June 16 language feels like a bit of a red herring. Nothing that fits the other definitions has received these documents since the start of Trump 2.0.)
Then there’s another factor: The only projects that would benefit from this language are ones that haven't started construction yet. Even if a project doesn’t have all of its permits for federal land use, its developer can build stuff like roads on any connected private lands and technically meet the deadline to start construction laid out in the new legislation. The construction start date is what counts — it doesn’t matter whether a project is placed in service and provides power to the grid years later, as long as it began construction before that deadline.
Taken together, all this means that a project that would benefit from this language probably has to be sited on federal lands and hold permits already … but for some reason can’t start construction to qualify for the program.
When I first started hunting for an answer, many people — including renewables advocates, anti-wind activists, and even some Senate staff in conversations with me — speculated that the language was a giveaway to two wind projects under construction in Wyoming, Chokecherry and Sierra Madre, which together make up what would likely be the largest wind farm in the U.S. if completed. These two projects are largely sited on federal lands and received all their approvals before Trump entered office.
I understand why people are pointing at Chokecherry and Sierra Madre. They are not expected to be online before 2029, and the House version of the bill would have locked them out of the production tax credit because it added a requirement that projects be “placed in service” — i.e. actively providing power to the grid — by around that same period. Any slippage in construction might have really hurt their finances. They’re also backed by a powerful billionaire, GOP donor and live entertainment power-broker Phil Anschutz, a man who made his initial fortune partially from fossil fuels.
Except … my colleagues and I are still not convinced. That’s because it is not clear that these two projects are at any actual risk of losing the production tax credit. They have been actively under construction for a long time, and the Senate bill killed the House’s “placed in service” requirement.
Another project floated is the Lava Ridge wind farm in Idaho, which was fully permitted under Biden, is largely sited on federal lands, and would produce more power than necessary to qualify for the exception. Hypothetically, this project would be a great candidate for being a beneficiary of the bill because Trump banned work on the project via executive order amid opposition from Idaho politicians, making a carveout to get more time a worthwhile endeavor.
Except … Senate Finance Chair Mike Crapo, the lead author of the pertinent section of the Senate reconciliation bill, was one of those Idaho politicians who pushed Trump to kill Lava Ridge. Why would he give a tax break to a project he wanted dead?
Then there was my personal best guess for the beneficiary: Esmeralda 7, an expansive set of proposed solar farms in the Nevada desert that, as proposed, would produce more than 5 gigawatts of power and is largely sited on federal land. Construction can’t begin until Esmeralda 7 gets its federal approvals, and the Trump administration was expected to complete that work by mid-summer.
Except … I reported last week that the permitting process for Esmeralda 7 is now indefinitely stalled. The project is at best still months away from getting its right-of-way approvals from the Trump administration, which recently pushed back timelines for finishing reviews of other large Nevada solar projects, too.
Ultimately, it will be difficult to glean who the lobbyist giveaway here is for unless the legislators who wrote it disclose their intentions. I reached out to the communications director for Republicans on the Senate Finance Committee to try and find out, but so far I’ve gotten crickets.
It may be that this language is revised and that future changes lay out the true beneficiary. Sometimes lawmakers will put the wrong date or word into a bill and they’ll edit it on the floor before a vote, chalking it up to a drafting error.
If senators decide to add back the “placed in service” requirement to capitulate to the House, this would easily be the Chokecherry-Sierra Madre giveaway. If Republicans were to shift forward the deadline for getting a right-of-way, Esmeralda 7 would qualify. Or maybe they could change some secret third thing and a different project I hadn’t considered will be revealed as the mastermind in the shadows.
Until then, I’ll be in my basement poring over more maps and going slowly insane.
Additional reporting was provided by Emily Pontecorvo.
On resuming rare earth shipments, hurricane tracking, and EV tax credits
Current conditions: The Ohio Valley is still sweltering through the last remnants of this week’s brutal heat wave • The death toll from recent floods in South Africa has risen to 101 • It’s 90 degrees in Venice, Italy, where the world’s rich and famous are gathering for the wedding of Jeff Bezos and Lauren Sanchez.
The U.S. and China have hammered out the details of a trade deal, including an agreement that China will resume rare earth shipments to the U.S. Rare earth materials are essential for everything from planes to EVs to wind turbines. China controls most of the world’s rare earth production and halted exports in April in response to President Trump’s tariff hike, and China’s chokehold on rare earths threatened to derail trade talks between the two countries altogether. Commerce Secretary Howard Lutnick said a deal has now been “signed and sealed.” “They’re going to deliver rare earths to us,” Lutnick said, adding that the U.S. will then “take down our countermeasures.” Lutnick also indicated that Trump plans to announce further trade deals with other nations in the coming two weeks.
As climate talks in Bonn, Germany, wind down, negotiators there have agreed to increase the budget for the United Nations Framework Convention on Climate Change by 10% over the next two years to 81.5 million euros ($95.4 million). The UNFCCC runs some of the world’s largest climate negotiations and tries to ensure countries follow through on their climate commitments. Its budget is funded by government contributions. China will account for 20% of the new budget, Reuters reported. The U.S. is supposed to cover 22%, but President Trump has pulled international climate funding. Former New York Mayor Michael Bloomberg’s philanthropic arm has stepped in to cover the missing U.S. contributions. UN climate chief Simon Stiell said the budget increase was “a clear signal that governments continue to see UN-convened climate cooperation as essential, even in difficult times.”
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Hurricane forecasting is about to get a little bit more difficult. At the end of June, the federal government is going to stop distributing readings from the Defense Meteorological Satellite Program, a tool forecasters all over the world have been using to track and predict hurricane development. As retired federal meteorologist Alan Gerard told Bloomberg, this particular satellite program is unique because it lets forecasters peer inside storms and monitor for rapid intensification. As the planet warms, hurricanes are strengthening much faster than they did in recent decades. Hurricane expert Michael Lowry says the Department of Defense seems to be concerned that the satellite data poses a security concern. Its termination “will severely impede and degrade hurricane forecasts for this season and beyond, affecting tens of millions of Americans who live along its hurricane-prone shorelines,” Lowry wrote.
A group of U.S. car dealers penned a letter urging senators to “reject provisions in the budget reconciliation process that would abruptly eliminate EV-related tax credits from the Inflation Reduction Act,” warning that sudden changes would bring about market uncertainty, damage businesses, and hurt Americans. The signatories – including EV Auto, Carmax, and Caravan – instead call for a “gradual sunset” of the EV tax credits to avoid disruption to the used car market. “A multi-year transitional period would also provide the opportunity for Americans to continue adopting cleaner vehicles more affordably,” they add. The tax and budget bill put forward by Senate Republicans would end the $7,500 EV tax credit within 180 days after the law’s passage.
A report out today from the International Council on Clean Transportation estimates that the world’s private jets produced more greenhouse gas emissions in 2023 than all the flights that took off from Heathrow Airport — the world’s fourth busiest airport — that same year. Emissions from private jets increased 25% over the past decade. A few more interesting (though perhaps not surprising) tidbits from the report:
International Council on Clean Transportation
Solar power accounted for more than 10% of U.S. electrical output in April, while wind provided about 14%. As Michelle Lewis at Electreknotes, “solar is now producing more electricity than hydropower, biomass, and geothermal combined.”