Economic analysis of CCUS: Accelerated development for CO2 EOR and storage in residual oil zones under the context of 45Q tax credit

Ren, Bo; Columbu, Stefano; Duncan, Ian

doi:10.1016/j.apenergy.2022.119393

Cited by 34 publications

(9 citation statements)

References 32 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The credit amount varies based on factors such as the in-service year of the equipment and whether the carbon oxide is geologically stored or used in enhanced oil recovery (EOR) projects. Here is a timeline of the information regarding the 45Q tax credit and how the range of the credit is determined [10,38,39].…”

Section: The 45q Tax Creditmentioning

confidence: 99%

Navigating the Implementation of Tax Credits for Natural-Gas-Based Low-Carbon-Intensity Hydrogen Projects

Lin,

2024

Energies

View full text Add to dashboard Cite

This paper delves into the critical role of tax credits, specifically Sections 45Q and 45V, in the financing and economic feasibility of low-carbon-intensity hydrogen projects, with a focus on natural-gas-based hydrogen production plants integrated with carbon capture and storage (CCS). This study covers the current clean energy landscape, underscoring the importance of low-carbon hydrogen as a key component in the transition to a sustainable energy future, and then explicates the mechanics of the 45Q and 45V tax credits, illustrating their direct impact on enhancing the economic attractiveness of such projects through a detailed net present value (NPV) model analysis. Our analysis reveals that the application of 45Q and 45V tax credits significantly reduces the levelized cost of hydrogen production, with scenarios indicating a reduction in cost ranging from USD 0.41/kg to USD 0.81/kg of hydrogen. Specifically, the 45Q tax credit demonstrates a slightly more advantageous impact on reducing costs compared to the 45V tax credit, underpinning the critical role of these fiscal measures in enhancing project returns and feasibility. Furthermore, this paper addresses the inherent limitations of utilizing tax credits, primarily the challenge posed by the mismatch between the scale of tax credits and the tax liability of the project developers. The concept and role of tax equity investments are discussed in response to this challenge. These findings contribute to the broader dialogue on the financing of sustainable energy projects, providing valuable insights for policymakers, investors, and developers in the hydrogen energy sector. By quantifying the economic benefits of tax credits and elucidating the role of tax equity investments, our research supports informed decision-making and strategic planning in the pursuit of a sustainable energy future.

show abstract

Section: The 45q Tax Creditmentioning

confidence: 99%

Navigating the Implementation of Tax Credits for Natural-Gas-Based Low-Carbon-Intensity Hydrogen Projects

Lin,

2024

Energies

View full text Add to dashboard Cite

show abstract

“…Meanwhile, the developments of the carbon market and carbon capture techniques may reduce the cost of CO 2 sources. The policy incentives are also essential to encourage the operators to promote the usage of CO 2 , for instance, the tax preference applied in the United States (Ren et al, 2022). The increasing proportion and decreasing cost may significantly promote the potential and contribution of CO 2 fracturing to CCUS, considering the huge consumption of fracturing fluids.…”

Section: Potential Of Co 2 Fracturing For Ccusmentioning

confidence: 99%

Promotion of CO2 fracturing for CCUS—the technical gap between theory and practice

Hou,

Luo,

Gong

et al. 2024

Front. Energy Res.

View full text Add to dashboard Cite

CO2, used as an environmentally friendly fracturing fluid, has encountered a bottleneck in development in recent years. Despite great efforts in research work, limited progress has been made in field applications. In this study, an extensive literature review of research work and field cases was performed to summarize the technical issues and challenges of CO2 fracturing. The key issues of CO2 fracturing were analyzed to reveal the gap between fundamental research and field operations. The effects of CO2 properties on fracture creation and proppant transport were synthetically analyzed to extract new common research orientations, with the aim of improving the efficiency of CO2 injection. The hydraulic parameters of CO2 fracturing were compared with those of water-based fracturing fluids, which revealed a theory-practice gap. By studying the developing trends and successful experiences of conventional fluids, new strategies for CO2 fracturing were proposed. We identified that the major theory-practice gap in CO2 fracturing exists in pump rate and operation scale. Consequently, the friction reducer, effects of flow loss (due to leak-off) and distribution (within fracture networks), and shear viscosity of thickened CO2 are key factors in improving both fracture propagation and proppant transport. By increasing the scale of injected CO2, the CO2 fracturing technique can be enhanced, making it an essential option for carbon capture, utilization, and storage (CCUS) to reduce carbon emissions and mitigate climate change.

show abstract

“…This study emphasizes the urgent need to delve deeper into the barriers hindering CCUS deployment and how macroeconomic factors, energy consumption, and energy prices influence the feasibility of CCUS projects and their impact on carbon emissions in the United Statesa nation recognized for its leadership in certain CCUS technology and implementation domains. Moreover, despite existing research focusing on the techno-economic analysis of CCUS projects [10][11][12] and general equilibrium models [13], empirical econometric research on CCUS capacity remains notably lacking [14]. Therefore, this study employs various econometric modeling techniques, including Ordinary Least Squares (OLS), Lasso, Ridge, Elastic Net, Generalized Method of Moments, and Seemingly Unrelated Regression (SUR), to uncover crucial insights into the link between CCUS capacity and carbon emissions and their associated factors, aiming to strengthen the robustness of the results and contribute significantly to the existing body of knowledge.…”

Section: Introductionmentioning

confidence: 99%

CCUS Technology and Carbon Emissions: Evidence from the United States

Mon,

Tansuchat,

Yamaka

2024

Energies

View full text Add to dashboard Cite

Carbon Capture, Utilization, and Storage (CCUS) represents a vital technology for addressing pressing global challenges such as climate change and carbon emissions. This research aims to explore the relationship between the CCUS capability and carbon emissions in the United States considering thirteen predictors of CCUS and carbon emissions. Incorporating these predictors, we aim to offer policymakers insights to enhance CCUS capabilities and reduce carbon emissions. We utilize diverse econometric techniques: OLS, Lasso, Ridge, Elastic Net, Generalized Method of Moments, and Seemingly Unrelated Regression. Elastic Net outperforms the other models in explaining CCUS, while OLS is effective for carbon emissions. We observe positive impacts of the number of projects and foreign direct investment on the CCUS capacity, but limited influence from the CCUS technology level. However, the relationship between the CCUS capacity and carbon emissions remains limited. Our study highlights the importance of incentivizing projects to increase CCUS capabilities and recognizes the critical role of legal and regulatory frameworks in facilitating effective CCUS implementation in the US. Moreover, we emphasize that achieving decarbonization goals necessitates the development of affordable green alternatives. It is essential to view CCUS as a complementary, rather than a sole, solution for emission reduction as we work towards achieving net-zero emission targets.

show abstract

Economic analysis of CCUS: Accelerated development for CO2 EOR and storage in residual oil zones under the context of 45Q tax credit

Cited by 34 publications

References 32 publications

Navigating the Implementation of Tax Credits for Natural-Gas-Based Low-Carbon-Intensity Hydrogen Projects

Navigating the Implementation of Tax Credits for Natural-Gas-Based Low-Carbon-Intensity Hydrogen Projects

Promotion of CO2 fracturing for CCUS—the technical gap between theory and practice

CCUS Technology and Carbon Emissions: Evidence from the United States

Contact Info

Product

Resources

About