The Global CCS Institute has welcomed California’s Air Resources Board (CARB) decision to include a protocol for carbon capture and storage (CCS) in its Low Carbon Fuel Standard (LCFS), a rule which became effective on 1st January (2019).
The protocol allows transportation fuels whose lifecycle emissions have been reduced through CCS to become eligible for credits under the LCFS. Currently, the credits are trading at roughly $180 per ton and can be combined with the federal tax credit for CCS projects.
Guloren Turan, General Manager of Advocacy and Communications at the Global CCS Institute, said, “The inclusion of the CCS protocol in the LCFS signals that California – arguably one of the most active states when it comes to combatting climate change – recognises that CCS has a role in its energy transition to deliver emissions reductions.”
Also known as 45Q, the federal tax credit provides $50/t for CO2 stored geologically and $35/t for CO2 stored permanently via enhanced oil recovery.
“In the medium term, the establishment of a CCS protocol also paves the way for CCS to become eligible in the state’s Cap-and-Trade Programme,” Turan said.
CARB’s decision comes on the heels of two other landmark climate commitments in California, which the Global CCS Institute support.
In September (2018), the California State Legislature passed SB100, which requires the state to generate 100% of electricity from carbon-free sources with a renewable portfolio standard of 60% built in.
The same month, Governor Jerry Brown also signed Executive order B-55-18, requiring the entire economy to achieve carbon neutrality by 2045.