BAKU, Azerbaijan, Dec.2. The United States is set to lead LNG carbon capture, storage and utilization investments, Trend reports via Fitch Solutions.
The company notes that the predictions are based on the US strong expertise in Carbon Capture, Utilisation and Storage (CCUS) solutions, favourable regulatory environment for CCUS investments, tightening environmental standards and bullish outlook for both LNG export and liquefaction capacity growth.
“In our view, the US is set to attract investment in the deployment of carbon capture along the LNG supply chain given a confluence of factors, both on the regulatory as well as the industry side. On the regulatory side, we point at two forces supporting our bullish outlook for CCUS investments; the US government incentivizes investment in CCUS through a number of initiatives such as a USD6.0bn fund for CCS research, development and demonstration programs included in the US Energy Act 2020 or updated tax credit released in January 2021 (sometimes referred to as IRS section 45C). In brief, the updated tax regulations have raised the CCUS tax credit to USD31.77/mtCO2 in 2020, growing to USD50.0/mtCO2 by 2026 for geologically sequestered CO2 (from USD23.82/ mtCO2) and a credit of USD20.22 in 2020 increasing to USD35.0/mtCO2 by 2026 for geologically sequestered CO2 with enhanced oil recovery (from USD11.91/mtCO2),” reads the latest report from Fitch Solutions.
The company also sees a broader momentum behind the tightening of environmental standards for energy projects in the US under the Biden administration. Both of these factors support out bullish outlook for CCUS projects in this market.