CEQ report calls for widespread CCUS deployment to achieve climate goals.

By Joshua T. Bledsoe, Nikki Buffa, and Nolan Fargo

On June 30, 2021, the White House Council on Environmental Quality (CEQ) issued a report to Congress that outlines a framework for how the US can accelerate carbon capture, utilization, and sequestration (CCUS) technologies and projects in a way that is efficient, orderly, and responsible.

Identifying CCUS Needs

The report, which Congress directed CEQ to prepare as part of the USE IT Act, states that to successfully increase CCUS deployment, strong and effective permitting and regulatory regimes and meaningful public engagement will be required. These measures include:

  • Developing regulatory regimes in a manner that is informed by science and experience
  • Addressing pollution in overburdened communities
  • Increasing support for CCUS research
  • Developing and enhancing incentives such as 45Q Tax Credits

The report states that the pathway for regulating CCUS projects already is established by existing regulatory frameworks, but given the nature of CCUS projects, which combine multiple complex undertakings (e.g., capture, transport, storage), the precise mix of permits and reviews needed for a particular CCUS project will be determined on a project-by-project basis. The report provides an overview of the existing regulatory framework for a CCUS project, which includes federal, state, local, and tribal regulatory regimes, and identifies how the regulatory framework can be improved.

Suggested Improvements the Federal Government Can Make

Some of the potential improvements the report suggests include:

  • Improving federal staffing capacities and training of federal policymakers and permit writers
  • Improving the National Environmental Policy Act (NEPA) process for CCUS projects, including potentially developing programmatic Environmental Impact Statements and CEQ NEPA guidance specifically for CCUS projects
  • Ensuring increased and more effective collaboration between state and federal agencies

The report recognizes that CCUS has a critical role in decarbonizing the global economy and that the US will have to increase CCUS deployment ten-fold over the next ten years to achieve its climate goals (net-zero emissions economy-wide by 2050). The report acknowledges the extensive research that identifies the priority pathways and necessary carbon dioxide pipeline infrastructure required to deploy CCUS on this scale, but emphasizes that significant investments, planning, and community engagement and analysis will be required to site and construct the pipelines needed for carbon dioxide transport. The report also identifies the wide variety of ways by which the captured carbon dioxide can be converted into a product of commercial value, also known as carbon utilization.

Next Steps

CEQ will establish an interagency working group to develop guidance based on the report and establish no fewer than two regional task forces. Any new guidance based on this report should be issued to agencies by the end of the year.

Latham & Watkins will continue to track CEQ and related federal agency activity on CCUS. For more information, see Latham’s previous Client Alerts and webcast.