A study on the Legistration of Incentives for CCUS - Focused on U.S and Canada - (CCUS를 위한 인센티브 법제에 관한 연구)

Kim Myung-Yeop (김 명 엽)

A study on the Legistration of Incentives for CCUS - Focused on U.S and Canada -

Public Land Law Review
Abbr : KPLLR
2021, 96(), pp.243-268
Publisher : Korean Public Land Law Association
Research Area : Social Science > Law
Received : October 31, 2021
Accepted : November 22, 2021
Published : November 25, 2021

Kim Myung-Yeop ¹

¹한국법제발전연구소

Accredited

ABSTRACT

Carbon Capture, Utilization and Storage(CCUS) is a technology that can capture and make effective use of the high concentrations of CO₂ emitted by industrial activities. But due to the relatively high cost of capital that applies to CCUS investments because of their perceived risk, In the early stages of deployment for CCUS equipment, capital support from government is likely to be necessary to mobilise private capital in the majority of cases. Already U.S federal government is employing a range of policy tools and incentives including tax credits and direct government grants to address roadblocks and challenges to promote CCUS projects through various legislation. Above all, The tax credit(Internal Revenue Code [IRC] Section 45Q) for carbon oxide sequestration is intended to incentivize investment in carbon capture and sequestration. The 45Q tax credit has been expanded a number of times since it was initially established in 2008, most recently at the end of December 2020. IT offers a tax credit that varies from just under $12 up to $50 for each metric ton of carbon captured and sequestered, depending on the timing and type of project. And it clarified how long credits would be available for 12years, beginning when the carbon capture equipment is in service providing more certainty for investors. In addition to the 45Q, the U.S. Congress has enacted various acts for CCUS For example, the Carbon Capture Modernization Act will improve the utility of the 48A tax credit and enable investment in carbon capture to reduce emissions from the power sector. The bill acts as a companion to other financing efforts, such as the 45Q tax credit, to dramatically spur more deployment of carbon capture,. In Cnada, Budget 2021 proposes to introduce an investment tax credit for capital invested in CCUS projects with the goal of reducing emissions by at least 15 megatonnes of CO₂ annually. This bill like the 45Q .will come into effect in 2022, Effective and efficient introduction of tax incentives for CCUS requires that they be carefully legislated in Korea.

KEYWORDS

Carbon Capture Utilization and Storage, section 45Q, Tax Credit, Carbon Capture Modernization Act, government grants

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