Top 5 New Technologies for Clean U.S. Chemical Production
Chemical production and refining play a critical role in producing essential fuels for, power, heat and transportation while also creating vital inputs for a wide range of products such as plastics, fertilizers and pharmaceuticals—key export commodities for the U.S.. Chemical production and refining processes are also the largest contributors to industrial CO2 emissions in the U.S. economy, accounting for 11 percent of energy-related emissions and a striking 37 percent of all industrial CO2 emissions. Those emissions are projected to increase by 20 percent by 2050, largely driven by a rise in demand for chemicals. As demand increases, the U.S. has the opportunity to lead the way forward in clean chemical manufacturing while reducing emissions.
The good news is that clean solutions do exist for the chemical sector. Let’s take a deeper look at announcements to date and what has yet to come.
Mapping the Top 5 Tech Innovations for Emission Reduction
Combining Nuclear with Clean Chemical Production: Seadrift Advanced Reactor Dow and X-energy have partnered to deploy a groundbreaking small modular, high-temperature nuclear reactor at Dow’s chemical production site in Seadrift, Texas. This advanced reactor, equipped with four modules, is set to reduce site emissions by approximately 440,000 metric tons of CO2 equivalent per year. The project, backed by ARDP funding, marks a significant milestone as the first high-temperature gas reactor to be deployed domestically in the U.S.. Only one other reactor of its kind exists, which began operations in China in December 2023. This first-of-its-kind initiative will help decarbonize power and heat needs for industrial customers, positioning the U.S. as a leader in advanced nuclear technology for clean manufacturing applications. Construction is slated to begin in 2026, with operations expected to start by 2028.
Reducing Emissions with Electric Steam Cracking: Channelview E-Furnace Demonstration Technip Energies, LyondellBasell and Chevron Phillips are collaborating on the design, construction, and operation of a demonstration unit for an electric steam-cracking furnace in Channelview, Texas. This innovative technology enables clean electricity to be a heat source for the olefins cracking process (a petrochemical process in which large hydrocarbons are broken down into smaller hydrocarbons), which is responsible for approximately 12 to 13 percent of CO2 equivalent emissions. Steam-cracking furnaces, which operate at over 1,500°F, play a vital role in breaking down hydrocarbons into olefins and aromatics — key building blocks for various chemicals. By switching to electric power, the new e-furnace has the potential to reduce greenhouse gas emissions by up to 90 percent compared to conventional furnaces.
PET Recycling Decarbonization Project: Eastman’s Circularity Initiative Eastman is leading the way in plastic recycling with its first-of-its-kind molecular recycling facility in Longview, Texas, which aims to transform landfill-bound waste streams into virgin-quality polyethylene terephthalate (PET). PET is a kind of plastic derived from petroleum and is known for its durability, malleability, and widespread use in various fields (i.e., fiber materials, plastic bottles, etc.). The Longview facility, which has received up to $375 million in funding from the Department of Energy’s Office of Clean Energy Demonstrations, plans to use thermal energy storage coupled with on-site solar power to recycle approximately 110,000 metric tons of hard-to-recycle plastic waste. By doing so, Eastman’s process will create products that have 70% lower emissions than traditional products. When accounting for avoided incineration emissions, this figure rises to 90%.
Advancing Opportunities to Fuel Switch: ExxonMobil Baytown Olefins Project Exxon’s Olefins Project in Baytown, Texas, is set to revolutionize ethylene production by using hydrogen in place of natural gas. Ethylene is a base chemical that is used as a feedstock for more complex chemicals, like polymers. This project, which has secured up to $331.9 million in federal funding, involves implementing new burner technology capable of using 100% hydrogen. The switch is expected to avoid 2.5 million tons of CO2 emissions annually, reducing site-wide emissions by approximately 30 percent of current operations. In addition to creating 400 construction jobs and retraining 140 workers, this project is a significant step in proving that clean hydrogen can decarbonize large industrial facilities. The successful demonstration of hydrogen fuel switching could provide a pathway for reducing emissions across the entire chemical industry.
Clean Feedstocks for Cleaner Ammonia: Trammo and ReMo Energy Pilot Project Trammo, Inc., a raw materials distributor, and ReMo Energy, Inc., a clean chemical start-up, have signed a Memorandum of Understanding to produce clean ammonia at ReMo’s forthcoming plant in Meredosia, Illinois, which could be the first-of-its-kind in the U.S. ReMo will produce clean ammonia from clean hydrogen at a site co-located with Trammo’s existing ammonia terminal in Illinois. Trammo is the exclusive off-taker of ReMo’s ammonia. By optimizing the plant design with distributed scale and electrolyzer integration, ReMo aims to build ammonia production plants at a lower cost than traditional plants. This partnership represents a major step toward cleaner ammonia production, which is essential for reducing emissions from agriculture and other industries.
The Path Forward: U.S. Leadership in Clean Manufacturing As the demand for chemicals grows, so do the challenges and opportunities in decarbonizing the U.S. clean manufacturing sector. By embracing advanced technologies such as small modular reactors, electric steam cracking, molecular recycling, hydrogen and others, America can lead the global shift towards cleaner, more innovative chemical production processes. This is not only an opportunity to reduce emissions but also an economic opportunity, as U.S. producers can utilize their emissions advantage over global competitors, particularly China, to access markets with demand for cleaner goods. Now is the time for the U.S. to build off this momentum and position itself as the global leader in reducing emissions through clean manufacturing.
Coastal Blue Carbon 101
Blue carbon is the term used to describe the “watery” nature of carbon captured by the ocean and coastal ecosystems. Coastal blue carbon ecosystems refer to biomass-based coastal habitats, such as salt marshes, mangroves and seagrass meadows, that store carbon dioxide through photosynthesis. These ecosystems are a major carbon sink – storing about 50 percent of the Earth’s carbon, despite occupying less than 5 percent of global land area and less than 2 percent of the ocean. In addition to their carbon storage potential, these ecosystems create flood-resilient communities, provide economic benefits by supporting fisheries, enhance property values and improve nutrient cycling. However, the loss and degradation of coastal blue carbon ecosystems reduce future carbon sequestration potential and can emit carbon dioxide (CO2) back into the atmosphere. Therefore, the restoration, maintenance and conservation of these areas are essential to achieving global emissions reduction goals. Together, this makes coastal blue carbon ecosystems among the world’s greatest natural tools to address climate-related challenges today. In fact, the Intergovernmental Panel on Climate Change (IPCC) has recognized coastal blue carbon as a necessary pathway to harness the resiliency of nature and naturally remove excess carbon from the atmosphere.
This Coastal Blue Carbon 101 provides an overview of this promising natural carbon removal solution and policies that may bolster additional deployment across coastal states. Recommendations include:
Enhancing support for coastal blue carbon R&D initiatives to understand the carbon sequestration and storage potential of coastal blue carbon projects.
Developing a collaborative and coordinated effort to map current and future coastal blue carbon ecosystems to determine geographic areas for increasing blue carbon stocks.
Support the wide-scale deployment of coastal blue carbon pathways through market incentives and by building in carbon removal and sequestration to coastal restoration and creation project designs.
What is Coastal Blue Carbon?
A Nature-based Carbon Removal Solution – Coastal blue carbon is considered a nature-based carbon dioxide removal (CDR) solution. Nature-based CDR solutions remove and store carbon from the atmosphere through naturally occurring processes – like photosynthesis, which takes sunlight and CO2 from the air to make water and sugar for the plant. Nature-based CDR solutions are recognized as a promising set of pathways to reduce emissions, with the global voluntary carbon market recording a 170% increase in the traded volume of nature-based carbon credits between 2017 and 2018.
The Most Efficient Natural Carbon Sink – In the U.S., coastal blue carbon ecosystems sequester an estimated additional 6.7 million tons of carbon dioxide equivalents (MtCO2e) annually, as of 2022. This is equivalent to CO2 emissions from energy usage in over 960 thousand U.S. homes each year. Globally, coastal blue carbon ecosystems sequester 0.84 billion tons (Gt) CO2 per year. It has been estimated that coastal blue carbon can annually sequester carbon at a rate ten times greater than mature tropical forests while covering far less area, making them the most efficient natural carbon sinks in the world, all while providing multiple co-benefits. This is possible because coastal blue carbon ecosystems are made up of oxygen-depleted flooded soil, which slows down decomposition.
A Solution for Economic and Environmental Resiliency – Harnessing coastal blue carbon pathways can improve resiliency and bolster the economies of coastal communities by creating solutions in the face of extreme weather and changes in marine ecosystems. These nature-based solutions can be integrated into community planning to provide (1) billions of dollars in savings during floods, (2) economic benefits by maintaining habitats for marine life used by fisheries that support economic activity and food supply, (3) improved water quality for residents and wildlife and (4) protect dozens of military installments and training grounds from storm surge and coastal flooding.
Types of Coastal Blue Carbon
The three main types of coastal blue carbon ecosystems are salt marshes, mangrove forests and seagrass meadows. Salt marshes are coastal wetlands flooded and drained by salt water brought in by the tides and are dominated by plants such as grasses, reeds and sedges. Salt marshes can be found on the coasts of the United States, with about half of the nation’s salt marshes located along the Gulf Coast. Mangroves are salt-tolerant trees that grow where land and sea meet, typically along shores, rivers and estuaries. Mangrove forests in the U.S. are found throughout the Gulf of Mexico, although increases in water temperature may lead to their northward expansion Figure 1. Seagrass is aquatic grass found in shallow coastal waters around the world. Figure 2 shows that sea level determines the designation of these ecosystems. Tidal marshes and mangrove forests exist both above and below sea level, while seagrass is strictly underwater. Table 1 provides a comparison between these three coastal blue carbon ecosystems.
Water level determines the location of coastal blue carbon ecosystems
Mangroves are salt-tolerant trees that grow where land and sea meet, typically along shores, rivers and estuaries. Mangrove forests cover 33-49 million acres around the world, which is on average the size of the state of Iowa. A majority of mangrove forests in the U.S. can be found on the Gulf Coast, primarily in Florida and Louisiana, due to warmer temperatures. An estimated 500,000 acres of mangroves in the coastal areas of Central and South Florida.
Mangrove carbon sequestration – Mangrove forests store more than 11.7 Gt of carbon globally, which is equivalent to 22% of 2023 global emissions. The restoration of all feasible mangrove regions in the world has been estimated to sequester up to an additional 688 Mt of carbon over a 40-year period, a greater carbon storage potential than afforestation. With optimal market incentives in place, 20% of global mangrove forests can be restored and contribute to the removal of 29.8 MtCO2e each year. The mangrove forests in Florida’s Everglades National Park can store carbon valued at nearly $3 billion.
Benefits of mangrove restoration and protection – Mangroves make up resilient coastal ecosystems that withstand damage from storms, preventing over $11 billion in property damage globally every year. For example, during Hurricane Irma in Florida, mangroves averted $1.5 billion in storm damages and protected over half a million people. Mangrove forests also provide key ecosystem benefits, including (1) serving as a habitat and nursery for many marine species, (2) providing economic opportunity for coastal communities and (3) supplying seafood for millions of people. They are also valuable for fisheries, with an annual median value of over $15,000 per acre for fisheries in the Gulf of California.
Salt Marshes
Salt marshes are coastal grassland ecosystems that are regularly flooded by seawater. North America is home to around 40% of global salt marshes. The U.S. has approximately 3.8 million acres of salt marshes, about a quarter larger than the state of Connecticut. A vast interconnected 1 million acres stretches from North Carolina to Florida. Louisiana accounts for up to 40% of the coastal salt marshes in the contiguous U.S.
Salt marsh carbon sequestration – Globally, salt marshes store an estimated 1.4-2.4 Gt of carbon, which is equivalent to removing over 571 million vehicles from the road each year. Restored marshes could result in approximately 13 to 207 Mt of additional CO2 accumulation per year, equivalent to removing over 49 million vehicles from the road each year. This would offset 0.51% of global energy-related CO2 emissions, a substantial amount considering that salt marshes make up less than one percent of Earth’s surface. As of 2013, Louisiana’s marshes were estimated to bury and store 4.3 million tons of carbon per year, which was 47% of the capacity of North America and 5-21% of the global capacity for carbon in tidal wetlands. North Carolina’s salt marshes currently hold around 64 million tons of carbon and sequester an additional 250,000 tons each year.
Benefits of salt marsh restoration and protection – Salt marshes play an important role in coastal flood protection, fisheries support and biodiversity enhancement. Salt marshes protect coastal communities from natural disasters that can cause infrastructural storm and flooding damage, preventing over $23 billion in storm protection services annually in the United States. Salt marshes, and the estuaries that support them, also provide habitat for more than 75% of commercial and recreational fish species in the U.S. including white shrimp, blue crab, redfish and flounder.
Seagrass
Seagrass meadows are underwater coastal ecosystems composed of aquatic grasses. Globally, the documented area of seagrass coverage is accepted by researchers to be an underestimate at 43.7 million acres, equivalent to nearly the size of the state of Oklahoma. This is an underestimate because many seagrass meadows have not been fully charted. Models that consider uncharted areas indicate a three times greater area of seagrass meadows at 148 million acres, or similar to the size of the state of Texas.
Seagrass Carbon Sequestration – Globally, seagrass meadows could store as much as 8.5 Gt of carbon, equivalent to energy emissions from over 1.1 billion homes in the U.S. each year. This is as much as salt marshes and mangroves combined, primarily due to more global acreage. Seagrass habitat throughout the Mississippi River Delta stores up to 35 Mt of carbon, a greater storage capacity than any other terrestrial or marine area and even higher than seagrass habitats in other locations.
Benefits of seagrass restoration and protection –The 1 million acres of salt marshes within the South Atlantic states (Florida, Georgia, South Carolina and North Carolina) shield over a dozen military installations and training grounds from storm surges and coastal flooding. Economically, seagrass meadows contribute over $20 billion each year to Florida by providing habitat for commercially and recreationally important fish. For instance, a single acre of seagrass meadow can be home to 40,000 fish and 50 million invertebrates. Additionally, coastal tourism and recreation in seagrass ecosystems along Florida’s coast generates $250 million annually across 8,000 jobs and 500 companies.
Policy
Research and Development (R&D) — Continued support for coastal blue carbon R&D initiatives, as carried out by Federal research agencies like the National Oceanic and Atmospheric Administration (NOAA), National Aeronautics and Space Administration (NASA), Department of Energy (DOE), U.S. Geological Survey (USGS) and the National Science Foundation (NSF), will be important to understand the carbon sequestration and storage potential of coastal blue carbon projects. R&D initiatives could include long-term research studies examining the impact of (1) different coastal ecosystems, (2) plant species and (3) changes in climate or management during the maintenance of projects. R&D will also be needed to improve the consistency and accuracy of measurement, monitoring, reporting and verification (MMRV) of emissions from coastal blue carbon projects by improving remote sensing measurement tools and methods, including for satellites and aircraft.
Data Collaboration and Coordination — A collaborative and coordinated effort between federal agencies to map current and future coastal blue carbon ecosystems is necessary to determine geographic areas with the greatest potential for increasing blue carbon stocks. This collaborative data resource could expand on existing projects to include information on ongoing and planned coastal blue carbon projects. A project that could be expanded is the NASA-USGS National Blue Carbon Monitoring System, which integrates nationally available data sets, satellite data and field data to refine models used to measure carbon stocks and fluxes in changing coastal wetlands.
Wide-scale Deployment — To support the wide-scale deployment of coastal blue carbon pathways, coastal restoration and creation projects could design their planning processes with carbon removal and sequestration built-in. An existing projects that could implement this is the Department of Defense’s Readiness and Environmental Protection Integration Program (REPI), which preserves natural habitats near military installations through stakeholder partnerships. Market incentives and technology-inclusive regulatory pathways may be helpful in encouraging the incorporation of carbon removal into coastal restoration planning processes. Market incentives could look like tax incentives aimed at encouraging the incorporation of carbon measurements into projects, and purchase prizes, such as DOE’s Commercial CDR Purchase Pilot Prize, which aims to demonstrate how technology-neutral CDR purchase contracts can catalyze innovation. Streamlined permitting and regulatory processes that reflect the value of coastal blue carbon projects could also increase deployment and carbon removal.
Protecting American Intellectual Property is key to American Innovation
The House of Representatives took important steps this week to protect American interests in the face of hostile actors. Many of the bills passed this week focused on the increasing threat of influence from the Chinese Communist Party. These included a proposal from Rep. Carol Miller (R-WV) to add foreign entity of concern (FEOC) provisions to energy tax credits, protecting American advanced manufacturing.
This is especially relevant as the Department of Energy (DOE)’s cutting-edge research makes it a high-profile target for malicious actors that seek to pilfer U.S. intellectual property. As the pinnacle of America’s world-class energy innovation apparatus, DOE’s unique structure leverages the National Labs and public-private partnerships to deploy breakthrough technologies to address the toughest energy challenges. DOE must advance technological innovation while protecting American Intellectual Property (IP) and its licensure.
DOE frequently issues competitive funding awards through grants and cooperative agreements to industry, universities, state and local governments and nonprofits to implement research, development and technology deployment (RD&D). These awards result in DOE-funded intellectual property that is patented and then sold or licensed to other entities creating opportunities for technology transfer, which can generate large economic benefits to the U.S. provided it is not acquired by foreign entities.
However, such transfers are not without risks. A May 2024 Government Accountability Office (GAO) report, prompted by Sen. John Barrasso (R-WY) and Rep. McMorris Rodgers (R-WA), found that DOE is continuously behind the curve and needs to take critical action to protect the U.S. technological inventions it funds from foreign acquisition. Sen. Barrasso expressed his “deep concern about the ability of the DOE’s research security apparatus to resist threats from the Chinese Communist Party (CCP)” earlier this year in a letter to DOE Secretary Granholm. Sen. Barrasso underscored the imperative for the Department to “remediate its chronic counterintelligence shortcomings” through an effective plan of action.
This level of oversight is appropriate, especially given recent episodes like DOE’s 2022 selection of battery manufacturer Microvast for a $200 million award. The award was made notwithstanding existing DOE prohibitions on awardee participation in Chinese Talent Programs, as the company CEO had done. As a result of vigorous Congressional oversight, the award was later canceled.
To avoid similar stumbles, ClearPath recently provided recommendations that underscore the national economic and security imperative to protect American IP from illicit actors.
DOE can utilize an earlier and improved vetting process while managing new funding and authorities for demonstrations, supply chain and manufacturing. Privately, industry has expressed concerns that DOE has inconsistently applied licensing requirements and waivers, leading to protracted negotiations and project delays. GAO noted in its report that while DOE focuses on flexibility, industry and universities often value clarity and standardization. Such a perceived lack of clarity from DOE could dissuade well-qualified applicants from partnering with DOE for major funding programs. This may also result in a process where only the largest companies and most sophisticated operators with a stable of attorneys can afford to participate in protracted negotiations. It is a delicate balance, but ultimately, as a general principle, DOE should provide well-defined terms and conditions upfront.
DOE should ensure that IP licensing requirements for grants and cooperative agreements from the programs are in alignment with those of the National Laboratories. DOE and the laboratories can make access easier across the DOE complex, thus encouraging more partnerships. In a similar vein, DOE should develop a publicly accessible, no-regrets IP licensing template that is compliant and up-to-date. An awardee that uses the template for licensing its technology will have confidence in relying on parameters blessed by DOE.
To facilitate the advancement of U.S. economic security and technology leadership along with DOE and the organizations it contracts with, ClearPath recommends a combination of short-term goals and a long-term focus. One example is the DOE’s nuclear partnerships with Poland and Romania. In April 2024, DOE established the first-ever regional Clean Energy Training Center in Warsaw, Poland, aiming to catalyze the development of the nation’s civil nuclear energy program. The DOE can play an important role in building up the technical expertise of an allied country looking to build new technologies, like nuclear energy. By proactively engaging, the DOE can enable U.S. companies to better compete in the international market.
In the short-term, DOE could prioritize earlier and improved vetting of funding applicants and align compliance between the national labs through common IP licensing templates. These changes could make it easier for industry to work with both DOE programs and the National Labs. These actions could be part of a larger strategy to develop clear IP licensing procedures for universities and companies. This would be an important step to promote compliance and adequately protect any licensed IP. Beyond these themes, DOE could focus on increased transparency and reduce its reliance on waivers. DOE could promulgate explicit and discernible terms and conditions that are clear to funding applicants.
Longer-term, DOE could investigate providing access to a preliminary “background check” for partners to use to protect DOE-funded IP. DOE’s funding opportunities often require multiple partners and entities in a team that is applying to a solicitation. Choosing teaming partners is important from a security as well as technical perspective. Awardees receive equity investment inquiries and have outright sales opportunities for business units that have DOE-funded technology or for the IP itself. If DOE’s partners could vet potential partners by querying a database without having access to the data within it, that could provide some assurance of protection and may even help to capture more investment for DOE-funded technology.
Employing these solutions will strengthen DOE’s protection of American IP while improving access and encouraging energy innovators to partner with DOE. Employing the short-term solutions will provide the added bonus of making DOE’s processes, including award negotiating and contracting, faster, more efficient and more productive — a need we will lay out in our next blog in this series.
Sizing Up Energy Storage: The Grid Storage Launchpad Is Here
In August of 2024, the Department of Energy (DOE) dedicated the Grid Storage Launchpad (GSL) at the Pacific Northwest National Laboratory (PNNL). Years in the making, the $75 million GSL is now among the foremost storage research and development (R&D) facility in the country to accelerate the development of next-generation storage technologies. This facility is a testament to the world-class American energy innovation apparatus. This unique structure leverages DOE and the national labs to spur public-private partnerships that can deploy innovative technologies to boost grid reliability and reduce costs.
DOE first identified PNNL as the site for the GSL in 2019, followed by a larger announcement from then Energy Secretary Dan Brouillete in 2020. The GSL and the Energy Storage Grand Challenge both received support from former President Donald Trump in his proposed presidential budgets for FY2020 and FY2021.
The overarching goals of the GSL are supported by the bipartisan Better Energy Storage Technology (BEST) Act authored by Senators Susan Collins (R-ME), Martin Heinrich (D-NM) and Tina Smith (D-MN) on the Senate side, Bill Foster (D-IL), Jaime Herrera Beutler (R-WA), Sean Casten (R-IL), and Anthony Gonzalez (R-OH), and ultimately signed by former President Trump.The BEST Act received bipartisan, bicameral support, advancing out of the Senate Energy Committee and House Science Committee respectively with 23 co-sponsors in the Senate and 102 co-sponsors in the House. The bill was ultimately included in the Energy Act of 2020 and signed into law by former President Trump.
The BEST Act authorized the Department of Energy (DOE) to establish a cross-cutting energy storage system research and development program to improve the efficiency of the nation’s electric grid, while helping to align research efforts on energy storage technologies. These programs were subsequently funded to the tune of $500 million in the FY23 funding package, directing key resources to the DOE Offices of Electricity, Science, and Energy Efficiency and Renewable Energy.
The BEST Act is a step toward modernizing the U.S. energy grid by promoting American innovation for advanced storage technologies. The bill directed DOE to undertake three energy storage system demonstration projects and established a joint program between DOE and the Department of Defense to demonstrate long-duration storage technologies. It also advanced recycling efforts to reuse critical energy storage materials such as lithium, cobalt and nickel. Collectively, these efforts will help increase the resilience and reliability of the grid, lower energy costs and reduce reliance on foreign adversaries like China.
Grid reliability is a growing concern all across the country. Grid operators project major increases over the next decade to respond to the growth of data centers, AI and a budding U.S. manufacturing renaissance. From weather events to the retirement of baseload assets, the grid will need a full set of solutions featuring new technologies to meet ever-growing energy demand. For example, wind and solar are variable resources whose availability depends on the weather, which poses challenges to grid operators who must carefully balance supply and demand every minute of every day to keep the lights on. More innovation in storage technology will help with that balance.
The GSL facility is designed to specialize in the most pressing research areas, including testing basic materials and developing pilot-scale battery systems to validate new technologies. These types of activities are a key part of the innovation S-curve.
There continues to be broad, bipartisan support for energy storage innovation. In addition to the GSL, the Infrastructure Investment and Jobs Act (IIJA) provided funding for demonstration projects and key support for critical minerals innovations. Beyond these projects, the Trump Administration launched the Energy Storage Grand Challenge to ensure America can domestically develop and manufacture the energy storage technologies needed to meet market demands by 2030. Most recently, the Biden Administration launched the Long Duration Storage Shot, which aims to “reduce the cost of grid-scale energy storage by 90% for systems that deliver 10+ hours of duration within the decade.”
This strong federal support and broad public-private partnerships have catapulted energy storage as an innovation success story. These types of agreements can jumpstart innovation from the lab to commercial success.
Form Energy recently announced projects with utilities in Minnesota and Maine, in addition to nearing completion of their flagship factory at a former steel mill site in Weirton, WV. Quidnet recently received a SCALEUP Award from ARPA-E, and startups Antora and Rondo recently announced major fundraising rounds for their respective thermal battery technologies.
Even though the innovation these companies have put into action, there are still barriers that need to be overcome for broad deployment. These include reforms to wholesale electricity markets to ensure storage assets are compensated for the attributes they provide to the grid, market signals that encourage variable renewables to pair their output with energy storage to provide firm power, and improved models to incorporate long-duration storage into utility planning.
There is a lot of room for Congress to build on the success of the GSL, the BEST Act and the infrastructure law in the year ahead. These promising investments are just the beginning of a generational shift toward American made storage technologies.
Putting All the Carbon Management Innovation Pieces Together
One of the most exciting clean energy technologies the United States leads the world on is carbon capture, utilization, and storage (CCUS). The world’s abundant natural resources, or using them for industrial activity don’t alone create climate change, the emissions from them do.
That’s why reducing carbon dioxide emissions at scale doesn’t mean you must scrap existing technology. In America, we have the incredible ability to innovate our way to a clean energy future. CCUS can be used in the power sector to reduce emissions from natural gas and coal fired generation, ethanol production facilities, and difficult to decarbonize industries such as steel and concrete.
Perhaps you’ve heard that CCUS is expensive, or that it’s only going to benefit the oil and gas industry. At ClearPath, we follow the facts, so let’s dig into how this technology is cross-cutting and how it can be an economically viable tool for lowering global emissions.
Congress authorized a moonshot program in the Energy Act of 2020 to create a federal demonstration program to work with private sector innovators to scale up new technology. In 2021, Congress funded the program through the bipartisan Infrastructure Investment and Jobs Act (IIJA). In December 2023, the U.S. Department of Energy’s (DOE) Office of Clean Energy Demonstrations (OCED) selected three carbon capture demonstration projects for award negotiations, totaling $890 million in potential awards. These projects include the Baytown CCS Project in Texas, Project Tundra in North Dakota, and the Sutter Decarbonization Project in California.
Energy innovation is a little different than, say, a new app for your phone that runs algorithms. These are large construction projects that require millions of dollars of capital to build — just to see if the technology can work in real-world settings. The U.S. has a proud history of supporting energy projects in the early stages of development using demonstration programs. Once new technology is proven and shows its ability to lower commercialization costs, the private sector can adopt the technology. You can call this a public private partnership, or you can call it American innovation leadership coupled with good old-fashioned, market-based principles.
OCED is a critical piece of this innovation pipeline to aid in the transition of ideas from a lab to real-world applications. OCED’s CCUS demonstration projects can spur additional private-sector investment, and support the development of critical transportation and storage infrastructure across the CCUS supply chain.
Recognizing the importance of CCUS technologies in the Energy Act of 2020, Congress followed it up with the bipartisan IIJA of 2021, which allocated DOE $12 billion to carry out a range of carbon management initiatives, from direct air capture hubs to a CCUS demonstration program. IIJA also established OCED to help administer these new initiatives in collaboration with the private sector.
3 awarded, 3 more to go
The Energy Act and IIJA authorized and funded six potential CCUS demonstration projects. So far, only the three projects we mentioned have been selected for award negotiation – and none have officially received any award funds yet. A timely and efficient rollout of these critical funding opportunities will provide applicants visibility into expected timelines and decision-making milestones and ensure this program has the impact Congress intended.
Coordination of federal programs
A full value chain approach is critical for effectively demonstrating and deploying carbon capture technology. That includes developing a dedicated, diverse and reliable carbon transportation network, including pipeline, truck, barge, rail, and storage infrastructure.
To do this, OCED can leverage funding opportunities from other DOE programs, because once you capture the carbon it needs to go somewhere for utilization or storage. For example, Project Tundra, selected for award negotiation in the carbon capture demonstration program, has participated in DOE’s CarbonSAFE Initiative, which supports carbon storage projects. Another example is the DOE Carbon Dioxide Transportation Infrastructure Finance (CIFIA) program, which provides loans and grants to carbon transport project developers. By ensuring all midstream partners involved with OCED, from private sector pipeline to barge operators, are aware of and eligible for CIFIA support, funding opportunities can be leveraged across programs to support this critical transportation infrastructure. As DOE facilitates connections across complementary programs, it will be important that selected projects are co-located with other CCUS hubs and infrastructure to minimize duplicative efforts and optimize federal resources.
DOE could also facilitate the sharing of key learnings with CCUS demonstration program participants, including midstream and downstream project partners, and other offices. For example, in December 2023, DOE’s Office of Fossil Energy and Carbon Management (FECM) announced $40 million in funding for technical and informational educational assistance for carbon transport and storage project developers. DOE could ensure any learnings and best practices identified through FECM programs are transferred to participants in OCED’s carbon capture demonstration program and project partners. In addition, OCED can also provide specialized support for these demonstration projects. DOE can help applicants identify strategies to reduce project costs, hire personnel with the necessary skills and expertise, manage stakeholder relationships, and create plans to manage these large, complex projects.
Don’t forget about permitting
The timeline for permitting these projects is currently a tremendous barrier to success. Cross-agency coordination will be key to ensuring administrative delays do not prevent the build-out of transportation and storage infrastructure and hinder applicants’ ability to secure funding opportunities. Each part of the CCUS value chain is subject to its own unique, complex regulatory requirements that could fall under state or federal jurisdiction depending on the state. For example, applicants to DOE’s carbon capture demonstration program are required to obtain a Class VI permit, which allows for the underground storage of carbon. These permits are regulated by the Environmental Protection Agency (EPA) or, in some cases, by states that have been given authority, also called primacy. DOE requires applicants to provide evidence that these permits have been obtained or submitted to the EPA. If an applicant does not have a permit, they must explain when they expect to receive it.
However, the timeline for obtaining Class VI permits from the EPA can be long and unpredictable. It can take the EPA six years to issue a Class VI permit, and the agency has been slow to grant primacy to states – which have proven their ability to grant Class VI permits in a fraction of the time. A couple of perfect examples of how Class VI primacy works wonders are North Dakota where the state was able to issue a permit for Red Trail Energy in less than five months, or in Wyoming where their Department of Environmental Quality (DEQ) issued a draft permit for Tallgrass Energy’s Juniper I-1 well in just over one year.
Similarly, applicants must also demonstrate they will have access to transportation infrastructure. However, carbon pipelines, which are regulated at the state level, have encountered an unpredictable regulatory environment, leading to significant delays and even the cancellation of projects. Streamlined permitting for carbon pipelines and updated Congressional direction for carbon pipelines R&D and safety standards would aid in the build-out of this key infrastructure.
Congress is already leaning into the issue of improvements to pipeline permitting and development. In March of 2024, the House Science, Space, and Technology Committee passed the Next Generation Pipelines Research and Development Act with bipartisan support. This bill would seek to modernize our pipeline system by authorizing new research and development programs focused on various pipeline technologies and uses, including the transportation of carbon.
From R&D, demonstrations, and transport we covered here to the private sector incentives known as 45Q, Congress has put the pieces on the table to finally scale up carbon capture. If we can find the proper permitting piece, and put them all together, the United States can reduce emissions at home and turn the innovations and technologies into business opportunities for American developers to find customers all around the world.
Procurement As A Catalyzing Federal Instrument For Carbon Dioxide Removal
This op-ed was originally published by Real Clear Energy on March 21, 2023. Click here to read the entire piece.
America’s energy economy is at a reckoning point and we must not allow the vast domestic resources, nor the investments in new clean energy technologies, to be squandered.
The 2022 energy tax incentives, along with the bipartisan infrastructure law of 2021 and increasing private sector investments in innovation have the potential to catapult U.S. clean energy projects and firmly establish American global leadership in clean energy deployment.
It’s truly an unprecedented moment and one that the United States can’t afford to let pass by. But all of this potential will be little more than talking points if projects cannot be permitted in a timely manner. Nowhere is this more apparent than in carbon capture and sequestration (CCS), which the International Energy Agency has said will be “necessary to meet national, regional and even corporate net zero goals.”
On the surface, moving more CCS projects has the support of both parties in Congress and the White House. President Biden’s Environmental Protection Agency (EPA) Administrator Michael Regan told energy executives at the CERAWeek conference in Houston that “carbon capture and storage is a priority for this Administration.”
That was music to the ears of many climate advocates, like myself, as well as the many energy project developers who are awaiting approvals for their CCS projects.
Biden missed a groundbreaking opportunity to level with Americans about climate policy (MarketWatch)
This op-ed was originally published by MarketWatch on February 8, 2023. Click here to read the entire piece.
President Joe Biden missed a critical opportunity during his State of the Union address on Tuesday. In touting the bipartisan infrastructure law, he directed a comment towards Republicans – “I’ll see you at the groundbreaking.”
In reality, breaking ground on anything will need a permit, and we unfortunately did not hear a plan to fix the permitting crisis. Reducing carbon emissions in the U.S. to net zero is actually achievable.
Done right, we could improve American energy security and be even more competitive in the global energy market. Europe is scrambling to keep pace with America’s new clean energy incentives. Parts of Asia, Africa and the Middle East have no electricity today while others are growing so fast they will need orders of magnitude more power. These are big challenges, but there is a political path forward to make more energy for the world, and make it cleaner. To have a chance at success, the U.S. must change how it permits the construction of clean energy projects.
We often focus clean energy policy discussions on the next generation of technologies that emit less, or even no carbon dioxide (CO2). Those innovations are incredibly exciting, but as more and more companies are implementing bold goals to reach “net zero,” it’s imperative that we consider the great deal of CO2 already in the atmosphere. When we look at solutions, removing this existing CO2 needs to be part of the discussion. The good news is there are tremendously exciting activities and technology developments happening to address this challenge.
“Carbon dioxide removal” or “CDR” is becoming a common term in climate and clean energy policy discussions. But what is it? ClearPath is beginning to tackle the what, but also the how.
Here’s another way to think about it: greenhouse gases are building up in the atmosphere like a bathtub being filled with water. But, like a bathtub, if CO2 is emitted faster than plants can absorb it, a little overflow is not ideal and significant overflow will cause all kinds of problems.
Right now, there’s more CO2 in the atmosphere than there should be. The National Academy of Sciences estimates that roughly 10 gigatons (Gt) of CO2 will need to be removed yearly by mid-century to reach net-zero – this doubles to 20 Gt globally by 2100. Though planting more trees to absorb more CO2 is part of the solution, trees do not remove CO2 as quickly or permanently as engineered carbon dioxide removal technologies. What’s needed are innovative solutions that can permanently remove significant amounts of CO2 and keep it out of the atmosphere, and grow and support economic and community development.
A few solutions are starting to gain popularity, like Carbon Engineering’s direct air capture machines or Charm Industrial’s biomass to bio-oil process, but these solutions alone are not enough — this is where policy steps in.
How can policymakers and the private sector accelerate CDR solutions?
A new proposal in the U.S. Senate to advance carbon removal: The Carbon Removal and Emissions Storage Technologies (CREST) Act was introduced by Sen. Susan Collins (R-ME) and Maria Cantwell (D-WA) on June 16, 2022.
The CREST Act would build on CDR research, demonstration, and development (RD&D) authorized by past legislation to expand the Department of Energy’s (DOE) scope of carbon removal and storage technologies. The Energy Act of 2020 authorized the first comprehensive federal carbon removal research and development program, and the bipartisan Infrastructure Investment and Jobs Act (H.R. 3684) invested $3.6 billion in direct air capture (DAC) technology. The CREST Act creates a path toward diversifying CDR and storage research programs at DOE and the Department of Interior (DOI), quantifies the net impact of carbon removal projects, and establishes an innovative pilot carbon dioxide purchasing program to accelerate market commercialization of high-quality CDR solutions.
With increasing private and public sector commitments to reach net-zero emissions by 2050, companies are scrambling to invest in quantifiable, durable, and verifiable CDR solutions. Despite increased interest, current cost estimates show that private sector investment alone is not sufficient to research and deploy carbon removal pathways. The federal government has historically played a key role in scaling up new technologies through research, increased testing, and enhanced public-private partnerships. Removing carbon dioxide from the atmosphere could follow that same model.
On the upside, investments in CDR have soared since 2021 – Bloomberg noted that private sector investments in CDR reached $400 million in four years from 2017 – 2020, then spiked to $2 billion in four months of 2021. Just this summer, a business coalition led by Stripe launched the $925 million Frontier Fund to purchase permanent carbon removals over the next eight years. Additionally, the developer of the world’s largest direct air capture facility, Climeworks, recently closed $600+ million from investors
Federal policy is also already advancing CDR technologies, including DAC. A few notable advancements include:
ClearPath is plugging in and recently hosted an educational briefing with Congressional staff on the importance of adding CDR to the climate solutions toolkit.
ClearPath Chief Strategy Officer Jeremy Harrell moderated an expert panel discussion with Tom Michels of United Airlines,
William Swetra of Oxy Low Carbon Ventures, Harrell, Nan Ransohoff of Stripe, and Shashank Samala of Heirloom (L to R).
Nan Ransohoff, Head of Stripe Climate, highlighted that carbon removal efforts are substantially nascent and deserve government attention. The U.S. has the opportunity to become a leader in this space because “we cannot control what countries like China do, but the US can lead on CDR innovation at home and provide the high-quality solutions other countries aren’t willing to,” said Ransohoff.
When asked about the challenges facing the deployment of carbon removal, Shashank Samala, CEO of U.S.-based DAC company Heirloom, noted that “policy and incentives such as 45Q are going to be critical as we aim to scale these solutions.” It is important to note that there are a handful of bipartisan proposals pending in Congress that both increase the value of the credit per metric ton captured and extend eligibility to projects that begin construction by the early 2030s.
Tom Michels and William Swetra also noted that if we hope to deploy and scale CDR technologies, early engagement with impacted communities will be key to understand their needs and educate on the benefits of CDR deployment, including local economic opportunities and potential synergies that support existing local industries. Further, the pair recognized the DAC Hubs provision included in the bipartisan IIJA as an exciting opportunity to catalyze early deployment of DAC solutions to reach gigaton scale quickly and meet global carbon reduction goals.
In order to meet carbon dioxide emissions reduction goals, we need affordable solutions focused on technological innovation and market-based incentives for supply to meet surging demand. Concurrently, regulatory certainty that fosters the building out of storage and CO2 storage infrastructure is needed to enable the scale up of these solutions. A diverse set of high-quality CDR solutions is essential to removing carbon dioxide already in our atmosphere and affordably reducing emissions across the global economy.
