The US EPA Clean Power Plan: What it means for carbon removal solutions.

On August 3rd, the Obama Administration released the Clean Power Plan (CPP) in an effort to regulate greenhouse gas emissions from the electric power sector in the US.  The CPP provides an important and necessary first step for the US to start reducing emissions from power plants. Yet the relatively modest climate ambition and scope of the plan makes it even more critical to expand the President’s larger plan to curtail climate change to include new measures that foster the development of carbon removal solutions today. Here's our take on what the CPP does (and does not) do to foster the development for carbon removal solutions, and what it all means for the carbon removal field.

First, some background:

The Clean Power Plan (CPP) relies on the authority of the Environmental Protection Agency (EPA) to regulate pollution (including the “carbon pollution” causing climate change) under Section 111(d) of the Clean Air Act (here's a great resource explaining the details of the CPP). Specifically, the CPP requires that states individually cut emissions from existing power plants by 2030. As a result, the CPP is limited to controlling emissions from only a small (but significant) subset of overall greenhouse gas emissions.  Because the CPP is limited to existing power plants, many carbon removal approaches in the agriculture, forestry, and mining sectors (for example) are likely out of scope of the CPP regulatory authority. 

Sources of greenhouse gas emissions in the US, from the EPA. The electric sector emissions covered under the CPP represent a minority, but significant portion of total emissions in the US.

Sources of greenhouse gas emissions in the US, from the EPA. The electric sector emissions covered under the CPP represent a minority, but significant portion of total emissions in the US.

Modest climate ambition in the CPP = greater need for carbon removal solutions.

When implemented, the Clean Power Plan (CPP) will reduce emissions from power plants by 32% by 2030 from 2005 levels, accounting for about 10% of reductions of from total US emissions in 2005. However, the U.S. has pledged to reduce emissions by 26-28% from 2005 levels by 2025 in its internationally determined contribution (INDC) to the UN process, meaning that the US must make more than an additional 16% reduction from fuel efficiency standards, energy efficiency programs, non-CO2 greenhouse gas (e.g. methane, hydrofluorocarbons) reductions, and other components of Obama’s climate action plan in order to meet its INDC. So while the CPP may be political ambitious, it represents is only a small piece of what needs to be a more aggressive climate mitigation portfolio to align us with 2 degrees C warming scenarios that avoid dangerous climate change.

Because the emissions reductions proposed in the CPP are gradual and relatively modest, it is imperative that the US simultaneously develop and implement complementary policies that encourage the development of carbon removal solutions. Between now and 2030, we will continue to emit significant (albeit reduced) volumes of carbon dioxide emissions, and will likely need carbon removal solutions to clean up the carbon dioxide that accumulates in the atmosphere from this activity. 

So does the CPP do anything to incentivize the development of carbon removal solutions?

Not explicitly. The Clean Power Plan (CPP) likely would enable states to comply with their plan with carbon removal technologies that also produce power from stationary sources (e.g. bioenergy with carbon capture and storage (CCS)). But as mentioned earlier, it is unlikely that the CPP would enable compliance through non-power-sector carbon removal approaches like reforestation, direct air capture, and enhanced weathering, which are "outside the fence" of existing power plants and likely off limits for CPP regulation.

What's more, there are no special incentives for developing power-sector carbon removal solutions in the CPP. As a result, even though the CPP allows some carbon removal technologies such as bioenergy with CCS to comply with the CPP, it is unlikely that states will choose to deploy these technologies, as it likely will cost less for states to comply through the more established, less-expensive mitigation technologies listed as options for CPP compliance. In other words, it is unlikely that the CPP will provide the support that regulations such as PURPA or the PTC/ITC did for other renewable technologies (like solar and wind) back in the 80s and 90s.

Nevertheless, the CPP does help with the development of carbon removal solutions in two indirect ways:

1. Clearing up regulations around fossil energy with carbon capture and storage (CCS).

The Clean Power Plan (CPP) regulations do recognize the ability for fossil energy with CCS technology to help states meet their targets, but do not mandate it, citing high cost as a barrier to implementation across the entire industry. The EPA language states:

“Use of full or partial CCS technology should not be part of the BSER [best system of emissions reduction] for existing EGUs [electricity generating units] because it would be more expensive than the measures determined to be part of the BSER, particularly if applied broadly to the overall source category.”

Even by keeping the door open for fossil CCS projects (if not mandating the technology outright), the EPA has provided an opportunity for utilities and project developers to build fossil energy with CCS projects, and hopefully pave the way for carbon removal CCS techniques such as bioenergy with CCS and direct air capture and storage in the future. Early fossil energy with CCS projects can prove critical for examining uncertainties pertinent both to fossil CCS and carbon removal CCS (such as geologic storage concerns), as well as for helping to bring down costs related to the development of both fossil and renewable CCS projects.


2. Building a bridge to smart, sustainable bioenergy with CCS projects

Biomass energy under the Clean Power Plan is considered an emissions control technology, but the EPA has expressed concern with the sustainability of many biomass feedstocks. The EPA said it is

“not scientifically valid to assume that all biogenic feedstocks are ‘carbon neutral, but that the net biogenic CO2 atmospheric contribution of different biomass feedstocks can vary and depends on various factors, including feedstock type, production practices, and, in some cases, the alternative fate of the feedstock.’”

The EPA will consider this biomass accounting when approving each individual state’s CPP compliance plan, requiring each state to describe the types of biomass, how those proposed feedstocks should be considered, and measures for tracking and auditing performance. Thus, the EPA has the authority to deny any insufficient interpretation of sustainable feedstocks, but their execution in approving or denying biomass plans that do not result in emissions reductions is key.

This critical eye towards biomass lifecycle carbon account is important for ensuring carbon removal techniques such as bioenergy with CCS actually generate net negative carbon emissions in the future. Getting this accounting correct today for bioenergy projects without CCS will prove critical for the future of carbon removal.

Conclusion

It has become increasingly clear that the Administration's climate action plan, of which the Clean Power Plan is a critical part, is characterized by modest, gradual emissions reductions, that will likely be insufficient to curtail dangerous climate change without significant ratcheting in the near future. As a result, it is increasingly imperative that we also develop negative emissions technologies as part of our broader climate mitigation strategy. And while the CPP doesn't entirely exclude carbon removal approaches, it is unlikely to provide the regulatory tool needed to accelerate the development of these vital solutions.