Jew World Order

Congress Extends Tax Breaks for Clean Energy — and Carbon Capture

Environment groups worry the carbon capture credits will just boost fossil fuels. The ‘tax extenders’, meanwhile, cut some nuclear, solar and geothermal costs.

The compromise federal spending bill that Congress passed early Friday includes an array of tax credits for renewable energy, along with a controversial tax break for carbon-capturing technologies that will benefit the fossil fuel industries.

Known as  “tax extenders” because they expand or revive temporary benefits that had lapsed, these provisions will provide significant incentives for people and companies to invest in low-carbon forms of energy, ranging from residential installations of solar water heaters and geothermal heat pumps to nuclear power plants.

In some cases, industry groups had lobbied for the provisions for years with little gain while Congress extended solar and wind tax credits during the Obama administration and enacted the Trump administration’s recent broad tax break for corporate profits and personal incomes.

This time, the tax extenders made it into a package of spending provisions that will keep the government open for several weeks, while also guaranteeing large increases in military and domestic spending programs for two years, and raising the ceiling on the national debt. The package, which had bipartisan support in the Senate and was endorsed by the White House, overcame opposition from liberal and conservative flanks in the House and settles, at least for now, the main fiscal debates facing Congress.

Some of the tax breaks, like one that restores a tax credit for home geothermal heating and cooling, which can cost tens of thousands of dollars to install, should make a significant difference to individuals trying to lower their carbon footprints. The credit is 30 percent if the system is installed between 2017 and 2019, then drops to 26 percent in 2020 and 22 percent through 2021.

Others, like the carbon capture and sequestration provision, offer complicated and uncertain benefits to costly technologies that might or might not pay off—and that are hotly debated in environmental circles.

Some environmental groups say the carbon capture credits amount to a giveaway to polluters and actually encourage oil production. Others say carbon capture and storage technologies represent a critical solution for reducing carbon dioxide levels in the atmosphere.

Breaks for Biodiesel, but Nothing for Batteries

The bill also offers tax breaks to people for expenditures they made last year, including for vehicles powered by fuel cells and electric motorbikes.

In addition, the legislation extends tax credits to makers of biodiesel and “renewable diesel,” and pushes back the deadline for nuclear facilities to qualify for credits. The nuclear provision would benefit the only plant in the works, under construction by Southern Company, in Georgia.

But it disappointed some clean-energy advocates by omitting benefits for battery storage, a growing and crucial element of the expansion of wind and solar power.

Malcolm Woolf, senior vice president for policy at Advanced Energy Economy, a business coalition, said the legislation’s tax credit extensions would support investments in companies that together have revenues of $200 billion a year and employ 3 million people.

Two Views on Carbon Capture Credits

Earlier this week, a coalition of environmental groups had asked lawmakers not to expand credits for carbon capture and storage — specifically for enhanced oil recovery, which pumps carbon dioxide from power generators into underground oil fields where it frees up the oil and pushes it toward wells.

Tax credits for carbon capture and storage (CCS)  were written into previous legislation, but were limited in ways that cut off financing unless lenders and operators could be certain that the costly, unproven technology would work as intended. Opponents said the restrictions should not be relaxed as much as the industry wanted.

The groups, which included Earthjustice, Friends of the Earth and Greenpeace USA, said the credits, so far “have not delivered measurable progress toward more climate friendly uses of carbon such as permanent sequestration or utilization, and appear to only have been used to increase oil production.”

In a blog post Wednesday, before the final bill was released, Elizabeth Noll, legislative director for transportation and energy at the Natural Resources Defense Council, wrote, “Carbon capture can be a useful tool to reduce emissions of dirty power plants and industrial sources, but we need to strengthen accountability, not weaken it, to ensure taxpayer investments are benefiting them.”

Noll points out that the oil and gas industries already receive $15 billion in other forms of subsidies each year. The tax overhaul from December gives those industries billions of dollars in additional tax cuts by lowering the corporate income tax rate.

Other green groups have long pushed for more support for carbon-capture technologies and are applauding its inclusion. Senators with widely divergent views of climate policy, including Democrat Sheldon Whitehouse of Rhode Island and Republican Leader Mitch McConnell of Kentucky, favored it.

Bob Perciasepe, president of the Center for Climate and Energy Solutions (C2ES), praised the tax cuts for promoting low-carbon sources of energy, which he called “critically necessary to the goal of reducing greenhouse gas emissions by 80 percent by 2050.”

Supporters say the more generous tax credits could provide an essential boost for the industry, much as solar and wind credits did. The National Enhanced Oil Recovery Initiative (NEORI), a coalition of oil, gas, ethanol and environmental groups that worked on the legislation for more than six years, says the extended credits will only apply to projects that demonstrate they can successfully capture and store carbon dioxide.

“This is a climate bill, really,” said Stuart Ross of the Clean Air Task Force. “It’s really helping CCS, which the IPCC says we have to have because the fossil fuel industry is going to be around for some time.”