Fall Hydrogen & Carbon Capture Conference Speaker Provides Positive Outlook for the Appalachian Basin
Public policy wrapped around climate change is driving business activity worldwide, with the energy industry eyed as both the problem and part of the solution to reducing carbon intensity.
Should the move to net zero emissions maintain the current momentum, there will be a huge need for additional infrastructure, and Gideon Gradman believes incentives are key to financing new infrastructure.
“Incentives are a strong and effective policy driver to enhance returns and entice the market to take risk on modern technologies and new infrastructure,” according to Gradman, Managing Director of the Energy & Infrastructure Group at Baker Tilly Capital.
Gradman talked financing carbon capture and low carbon fuels at the recent Hydrogen & Carbon Capture Conference, held near Pittsburgh and produced by ShaleDirectories.com and H2-CCS Network.
According to Gradman, incentives include grants, cooperative funding agreements, loan programs and tax incentives.
Gradman told his conference audience the Section 45Q tax credit provides a dollar-for-dollar reduction in federal income tax liability for each metric tonne of “qualified carbon oxide” captured at a qualifying plant and then permanently sequestered in secure geological storage, used as an injectant in an enhanced oil or natural gas recovery (EOR) project, or used in another process that would result in the permanent disposal of the carbon oxide.
The credit value ranges from $10–50 per metric tonne, depending on when the carbon capture equipment is placed in service and what is done with the carbon oxide after it is captured.
The tax credit is higher ($50/MT) if the carbon oxide is permanently sequestered in secure geological storage, and $35/MT if geologically sequestered with EOR.
“And there is talk in Washington to raise the amount paid per metric tonne,” Gradman said.
The Baker Tilly Capital Managing Director is bullish on the recently signed Bipartisan Infrastructure Bill, which offers millions, if not billions, of dollars for financing carbon capture and hydrogen infrastructure projects.
The biggest chunk of funding, $8.5 billion over four years, will be used to create clean hydrogen hubs to demonstrate production, processing, delivery, storage and end-use of clean hydrogen, Gradman said.
“One of those hubs is expected to be established in the Appalachian Basin,” commented Tom Gellrich, H2 CCS Network Founder. He further added, “The Appalachian Basin should see considerable benefits not only from hydrogen generation budget, but also the $9.5 planned for carbon capture sequestration.”