One year ago today, Congress passed the Inflation Reduction Act (IRA), a monumental piece of legislation that promises significant funding for clean energy. The legislation introduced direct pay, tax provisions, and loan programs with the goal of expanding domestic clean energy infrastructure and achieving a net-zero carbon economy by 2050.
As part of its clean energy investments, IRA opened the door for a wide range of funding opportunities for carbon management technologies. Carbon management technologies aren’t new, but the scale of available funding for deploying these projects is, thanks in part to IRA.
Carbon management involves the reduction and mitigation of planet-warming carbon emissions. The suite of technologies—including the capture, transport, storage, and reuse of carbon emissions—opens the door for a cleaner energy future by safely addressing excess carbon emissions while the global transition to clean energy is underway.
The goal of carbon management is more than cutting carbon emissions: it is to create jobs, enhance energy security, advance environmental equity, and develop cleaner and more affordable energy.
Carbon management technology isn’t new. The first US carbon capture and storage facility began operation in 1972 and now, according to the Global CCS Institute, nearly 200 commercial carbon capture and storage facilities exist globally. These technologies can capture carbon at industrial emissions sources, like steel facilities, as well as from ambient air through direct air capture facilities. After the carbon is captured, it is transported in a growing network of pipelines for use in products like cement or clean fuels, or it is safely stored deep underground.
The urgency to rapidly build out carbon management and other clean energy projects is increasing. In its 2022 report, the United Nations Intergovernmental Panel on Climate Change (IPCC) addressed the unequivocal, negative impacts greenhouse gas emissions have had on the environment and recognized the importance of carbon technology in mitigating emissions. And we’re all experiencing changes in our own communities or hearing the stories of others whose lives have been altered by a changing climate.
There is no time to wait on transitioning to cleaner energy and cutting emissions. Cutting greenhouse gas emissions in half by 2030, and reaching net-zero emissions by 2050 is necessary to limit the impacts of climate-driven natural disasters, which pose a threat to the health of both people and the natural environment.
Federal support for these technologies has been ramping up over the last few years. IRA’s predecessor in energy legislation, the Bipartisan Infrastructure Law (BIL), was passed in 2021 and focused on upgrading transportation and core infrastructure, such as the power grid, to meet environmental standards. BIL and IRA are part of a greater policy trend toward decarbonizing energy, infrastructure, and transportation that gained strength
- Energy ($250 billion)
- Manufacturing ($48 billion)
- Environment ($46 billion)
- Transportation & electric vehicles ($23 billion)
- Agriculture ($21 billion)
- Water ($5 billion)
IRA has been called a once-in-a-century opportunity for clean energy funding. With the policies in place, it’s up to states, tribes, and energy project developers to apply for funding, which may be competitive. The process will require interested parties to formally communicate their intention to claim program funding and provide a plan for its use.
While the incentive-based structure of IRA makes it resilient in Congress, the broad scope of this legislation means that guidelines and development for these programs are ongoing and subject to change. The Internal Revenue Service released only a general spending plan for IRA funding in spring 2023. Given the scope and complexity of such legislation, it is important for interested parties to act now while funds are available.
We are now at that point where natural disasters are in the news daily, nearly the entire global population breathes air that exceeds the World Health Organization’s air quality limits, and the rate of species extinctions is accelerating. But with the passing of IRA and global attention on energy transitions, we finally have the opportunity to finance carbon management on a grand scale.
We must use this momentum and work together as policy makers, communities, and industry leaders to translate IRA incentives into real solutions that benefit both people and the planet.