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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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Republicans Mark Amodei of Nevada and Celeste Maloy of Utah introduced the measure late Tuesday night.
Late last week, the House Committee on Natural Resources released the draft text of its portion of the Republicans’ budget package. While the bill included mandates to open oil and gas leasing in Alaska’s Arctic National Wildlife Refuge, increase logging by 25% over 2024’s harvest, and allow for mining activities upstream of Minnesota’s popular Boundary Waters recreation area, there was also a conspicuous absence in its 96 pages: an explicit plan to sell off public lands.
To many of the environmental groups that have been sounding the alarm about Republicans’ ambitions to privatize federal lands — which make up about 47% of the American West — the particular exclusion seemed almost too good to be true. And as it turned out in the bill’s markup on Tuesday, it was. In a late-night amendment, Republican Representatives Mark Amodei of Nevada and Celeste Maloy of Utah introduced a provision to sell off 11,000 acres in their states.
The maneuver, which came at nearly midnight, left many Democrats and environmental groups deeply frustrated by the lack of transparency. “The rushed and last-minute nature of this amendment introduction means little to no information is available,” including “maps or parcel information, amendment text, CBO Score, etc.,” the Southern Utah Wilderness Alliance said in a statement Wednesday.
House lawmakers appeared still to be at odds during a Wednesday morning press conference to announce the creation of a Bipartisan Public Lands Caucus. Rather than putting on the united front suggested by the working group’s name, former Secretary of the Interior and Montana Republican Ryan Zinke argued in defense of the amendment, saying, “A lot of communities are drying up because they’re looking to public land next door and they can’t use it.” Michigan Democrat Debbie Dingell then took the mic to say, “I would urge all of us that the hearings — it’s not done in the dead of night, and that we have good, bipartisan discussions with everybody impacted at the table.”
Despite the cloak-and-dagger way Republicans introduced the amendment, there are several clues as to what exactly Amodei and Maloy are up to. Republican Senator Mike Lee of Utah has aggressively pushed for the sell-off of public lands, including introducing the Helping Open Underutilized Space to Ensure Shelter (HOUSES) Act, which would “make small tracts of [Bureau of Land Management] land available to communities to address housing shortages or affordability.” Critics of the bill have called it the “McMansion Subsidy Act” and have argued — as the Center for Western Priorities’ Kate Groetzinger, does — that it would “do little to address housing issues in major metros like Salt Lake City and the fact that the current housing shortage is due largely to a lack of home construction, not land.” The Center for Western Priorities also contends that it “contains very few restrictions on what can be built on federal public lands that are sold off under the program.” Notably, Lee and Maloy have worked closely together in the past on transferring federal land in Utah to private ownership.
The land singled out in the Tuesday amendment includes BLM and Forest Service parcels in six counties in Utah and Nevada that “had already been identified for disposal by the counties,” Outdoor Life notes. While some land would be sold with “the express purpose of alleviating housing affordability,” the publication notes that “other parcels, including those in southern Utah, don’t have a designated purpose.” As Michael Carroll, the BLM campaign director for the Wilderness Society, warned E&E News, it’s in this way that the bill appears to set “dangerous precedent that is intended to pave the way for a much larger scale transfer of public lands.”
While many Republicans contend that states can better manage public lands in the West than the federal government can (in addition, of course, to helping raise the $15 billion of the desired $2 trillion in deficit reductions across the government to offset Trump’s tax cuts), such a move could also have significant consequences for the environment. Turning over public lands to states — or to private owners — could ease the way for expansive oil and gas development, especially in Utah, where there are ambitions to quadruple exports of fossil fuels from the state’s northeastern corner.
Reducing BLM land could also limit opportunities for solar, wind, and geothermal development; in Utah, the agency has identified some 5 million acres of public land, in addition to 11.8 million acres in Nevada, for solar development. While there are admittedly questions about how much renewable permitting will make it through the Trump BLM, it’s also true that solar development wouldn’t necessarily be the preference of private landowners if the land were transferred.
Tuesday’s markup ultimately saw the introduction of more than 120 amendments, including a Democratic provision that would have prohibited revenue from this bill from being used to sell off public lands, but was easily struck down by Republicans. In the end, Amodei and Maloy’s amendment was the only one the committee adopted. Shortly afterward, the lawmakers voted 26-17 to advance the legislation.
Ecolectro, a maker of electrolyzers, has a new manufacturing deal with Re:Build.
By all outward appearances, the green hydrogen industry is in a state of arrested development. The hype cycle of project announcements stemming from Biden-era policies crashed after those policies took too long to implement. A number of high profile clean hydrogen projects have fallen apart since the start of the year, and deep uncertainty remains about whether the Trump administration will go to bat for the industry or further cripple it.
The picture may not be as bleak as it seems, however. On Wednesday, the green hydrogen startup Ecolectro, which has been quietly developing its technology for more than a decade, came out with a new plan to bring the tech to market. The company announced a partnership with Re:Build Manufacturing, a sort of manufacturing incubator that helps startups optimize their products for U.S. fabrication, to build their first units, design their assembly lines, and eventually begin producing at a commercial scale in a Re:Build-owned factory.
“It is a lot for a startup to create a massive manufacturing facility that’s going to cost hundreds of millions of dollars when they’re pre-revenue,” Jon Gordon, Ecolectro’s chief commercial officer, told me. This contract manufacturing partnership with Re:Build is “massive,” he said, because it means Ecolectro doesn’t have to take on lots of debt to scale. (The companies did not disclose the size of the contract.)
The company expects to begin producing its first electrolyzer units — devices that split water into hydrogen and oxygen using electricity — at Re:Build’s industrial design and fabrication site in Rochester, New York, later this year. If all goes well, it will move production to Re:Build’s high-volume manufacturing facility in New Kensington, Pennsylvania next year.
The number one obstacle to scaling up the production and use of cleaner hydrogen, which could help cut emissions from fertilizer, aviation, steelmaking, and other heavy industries, is the high cost of producing it. Under the Biden administration, Congress passed a suite of policies designed to kick-start the industry, including an $8 billion grant program and a lucrative new tax credit. But Biden only got a small fraction of the grant money out the door, and did not finalize the rules for claiming the tax credit until January. Now, the Trump administration is considering terminating its agreements with some of the grant recipients, and Republicans in Congress might change or kill the tax credit.
Since the start of the year, a $500 million fuel plant in upstate New York, a $400 million manufacturing facility in Michigan, and a $500 million green steel factory in Mississippi, have been cancelled or indefinitely delayed.
The outlook is particularly bad for hydrogen made from water and electricity, often called “green” hydrogen, according to a recent BloombergNEF analysis. Trump’s tariffs could increase the cost of green hydrogen by 14%, or $1 per kilogram, based on tariff announcements as of April 8. More than 70% of the clean hydrogen volumes coming online between now and 2030 are what’s known as “blue” hydrogen, made using natural gas, with carbon capture to eliminate climate pollution. “Blue hydrogen has more demand than green hydrogen, not just because it’s cheaper to produce, but also because there’s a lot less uncertainty around it,” BloombergNEF analyst Payal Kaur said during a presentation at the research firm’s recent summit in New York City. Blue hydrogen companies can take advantage of a tax credit for carbon capture, which Congress is much less likely to scrap than the hydrogen tax credit.
Gordon is intimately familiar with hydrogen’s cost impediments. He came to Ecolectro after four years as co-founder of Universal Hydrogen, a startup building hydrogen-powered planes that shut down last summer after burning through its cash and failing to raise more. By the end, Gordon had become a hydrogen skeptic, he told me. The company had customers interested in its planes, but clean hydrogen fuel was too expensive at $15 to $20 per kilogram. It needed to come in under $2.50 to compete with jet fuel. “Regional aviation customers weren’t going to spend 10 times the ticket price just to fly zero emissions,” he said. “It wasn’t clear to me, and I don’t think it was clear to our prospective investors, how the cost of hydrogen was going to be reduced.” Now, he’s convinced that Ecolectro’s new chemistry is the answer.
Ecolectro started in a lab at Cornell University, where its cofounder and chief science officer Kristina Hugar was doing her PhD research. Hugar developed a new material, a polymer “anion exchange membrane,” that had potential to significantly lower the cost of electrolyzers. Many of the companies making electrolyzers use designs that require expensive and supply-constrained metals like iridium and titanium. Hugar’s membrane makes it possible to use low-cost nickel and steel instead.
The company’s “stack,” the sandwich of an anode, membrane, and cathode that makes up the core of the electrolyzer, costs at least 50% less than the “proton exchange membrane” versions on the market today, according to Gordon. In lab tests, it has achieved more than 70% efficiency, meaning that more than 70% of the electrical energy going into the system is converted into usable chemical energy stored in hydrogen. The industry average is around 61%, according to the Department of Energy.
In addition to using cheaper materials, the company is focused on building electrolyzers that customers can install on-site to eliminate the cost of transporting the fuel. Its first customer was Liberty New York Gas, a natural gas company in Massena, New York, which installed a small, 10-kilowatt electrolyzer in a shipping container directly outside its office as part of a pilot project. Like many natural gas companies, Liberty is testing blending small amounts of hydrogen into its system — in this case, directly into the heating systems it uses in the office building — to evaluate it as an option for lowering emissions across its customer base. The equipment draws electricity from the local electric grid, which, in that region, mostly comes from low-cost hydroelectric power plants.
Taking into account the expected manufacturing cost for a commercial-scale electrolyzer, Ecolectro says that a project paying the same low price for water and power as Liberty would be able to produce hydrogen for less than $2.50 per kilogram — even without subsidies. Through its partnership with Re:Build, the company will produce electrolyzers in the 250- to 500-kilowatt range, as well as in the 1- to 5-megawatt range. It will be announcing a larger 250-kilowatt pilot project later this year, Gordon said.
All of this sounded promising, but what I really wanted to know is who Ecolectro thought its customers were going to be. Demand for clean hydrogen, or the lack thereof, is perhaps the biggest challenge the industry faces to scaling, after cost. Of the roughly 13 million to 15 million tons of clean hydrogen production announced to come online between now and 2030, companies only have offtake agreements for about 2.5 million tons, according to Kaur of BNEF. Most of those agreements are also non-binding, meaning they may not even happen.
Gordon tied companies’ struggle with offtake to their business models of building big, expensive, facilities in remote areas, meaning the hydrogen has to be transported long distances to customers. He said that when he was with Universal Hydrogen, he tried negotiating offtake agreements with some of these big projects, but they were asking customers to commit to 20-year contracts — and to figure out the delivery on their own.
“Right now, where we see the industry is that people want less hydrogen than that,” he said. “So we make it much easier for the customer to adopt by leasing them this unit. They don’t have to pay some enormous capex, and then it’s on site and it’s producing a fair amount of hydrogen for them to engage in pilot studies of blending, or refining, or whatever they’re going to use it for.”
He expects most of the demand to come from industrial customers that already use hydrogen, like fertilizer companies and refineries, that want to switch to a cleaner version of the fuel, or hydrogen-curious companies that want to experiment with blending it into their natural gas burners to reduce their emissions. Demand will also be geographically-limited to places like New York, Washington State, and Texas, that have low-cost electricity available, he said. “I think the opportunity is big, and it’s here, but only if you’re using a product like ours.”
On coal mines, Energy Star, and the EV tax credit
Current conditions: Storms continue to roll through North Texas today, where a home caught fire from a lightning strike earlier this week • Warm, dry days ahead may hinder hotshot crews’ attempts to contain the 1,500-acre Sawlog fire, burning about 40 miles west of Butte, Montana• Severe thunderstorms could move through Rome today on the first day of the papal conclave.
The International Energy Agency published its annual Global Methane Tracker report on Wednesday morning, finding that over 120 million tons of the potent greenhouse gas were emitted by oil, gas, and coal in 2024, close to the record high in 2019. In particular, the research found that coal mines were the second-largest energy sector methane emitter after oil, at 40 million tons — about equivalent to India’s annual carbon dioxide emissions. Abandoned coal mines alone emitted nearly 5 million tons of methane, more than abandoned oil and gas wells at 3 million tons.
“Coal, one of the biggest methane culprits, is still being ignored,” Sabina Assan, the methane analyst at the energy think tank Ember, said in a statement. “There are cost-effective technologies available today, so this is a low-hanging fruit of tackling methane.” Per the IEA report, about 70% of all annual methane emissions from the energy sector “could be avoided with existing technologies,” and “a significant share of abatement measures could pay for themselves within a year.” Around 35 million tons of total methane emissions from fossil fuels “could be avoided at no net cost, based on average energy prices in 2024,” the report goes on. Read the full findings here.
Opportunities to reduce methane emissions in the energy sector, 2024
IEA
The Environmental Protection Agency told staff this week that the division that oversees the Energy Star efficiency certification program for home appliances will be eliminated as part of the Trump administration’s ongoing cuts and reorganization, The Washington Post reports. The Energy Star program, which was created under President George H.W. Bush, has, in the past three decades, helped Americans save more than $500 billion in energy costs by directing them to more efficient appliances, as well as prevented an estimated 4 billion metric tons of greenhouse gas from entering the atmosphere since 1992, according to the government’s numbers. Almost 90% of Americans recognize its blue logo on sight, per The New York Times.
President Trump, however, has taken a personal interest in what he believes are poorly performing shower heads, dishwashers, and other appliances (although, as we’ve fact-checked here at Heatmap, many of his opinions on the issue are outdated or misplaced). In a letter on Tuesday, a large coalition of industry groups including the Air-Conditioning, Heating, and Refrigeration Institute, the Association of Home Appliance Manufacturers, and the U.S. Chamber of Commerce wrote to EPA Administrator Lee Zeldin in defense of Energy Star, arguing it is “an example of an effective non-regulatory program and partnership between the government and the private sector. Eliminating it will not serve the American people.”
House Speaker Mike Johnson suggested that the electric vehicle tax credit may be on its last legs, according to an interview he gave Bloomberg on Tuesday. “I think there is a better chance we kill it than save it,” Johnson said. “But we’ll see how it comes out.” He estimated that House Republicans would reveal their plan for the tax credits later this week. Still, as Bloomberg notes, a potential hangup may be that “many EV factories have been built or are under construction in GOP districts.”
As we’ve covered at Heatmap, President Trump flirted with ending the $7,500 tax credit for EVs throughout his campaign, a move that would mark “a significant setback to the American auto industry’s attempts to make the transition to electric vehicles,” my colleague Robinson Meyer writes. That holds true for all EV makers, including Tesla, the world’s most valuable auto company. However, its CEO, Elon Musk — who holds an influential position within the government — has said he supports the end of the tax credit “because Tesla has more experience building EVs than any other company, [and] it would suffer least from the subsidy’s disappearance.”
Constellation Energy Corp. held its quarterly earnings call on Tuesday, announcing that its operating revenue rose more than 10% in the first three months of the year compared to 2024, beating expectations. Shares climbed 12% after the call, with Chief Executive Officer Joe Dominguez confirming that Constellation’s pending purchase of natural gas and geothermal energy firm Calpine is on track to be completed by the end of the year, and that the nuclear power utility is “working hard to meet the power needs of customers nationwide, including powering the new AI products that Americans increasingly are using in their daily lives and that businesses and government are using to provide better products and services.”
But as my colleague Matthew Zeitlin reported, Dominguez also threw some “lukewarm water on the most aggressive load growth projections,” telling investors that “it’s not hard to conclude that the headlines are inflated.” As Matthew points out, Dominguez also has some reason to downplay expectations, including that “there needs to be massive investment in new power plants,” which could affect the value of Constellation’s existing generation fleet.
The Rockefeller Foundation aims to phase out 60 coal-fired power plants by 2030 by using revenue from carbon credits to cover the costs of closures, the Financial Times reports. The team working on the initiative has identified 1,000 plants in developing countries that would be eligible for the program under its methodology.