EC-Norway CCUS Forum

Thank you and good morning. 

I want to thank the European Commission and Royal Norwegian Ministry of Petroleum and Energy for organizing and hosting this forum, and I appreciate the invitation to speak to you today.

Let me start by acknowledging that we’re meeting at a particularly difficult time as Europe seeks to eliminate its reliance on Russian energy sources.  And I want to reiterate the United States’ support as you work to both diversify and decarbonize your energy production and use. We will continue to do everything we can to support the energy security and sustainability of our friends and allies in Europe, and this will be the major focus of my visits next week to Germany, the UK and Brussels.

A critical component of building a sustainable and secure energy future includes scaling up carbon management to help meet our energy security needs while fulfilling our shared climate obligations.

So, it’s fitting that we’re meeting today in Oslo.  The United States appreciates Norway’s pioneering and ongoing work on carbon capture and storage – from the flagship Sleipner and Snøhvit offshore carbon capture projects to the work being done at Test Centre Mongstad and, of course, current development of the Northern Lights project.

I had the opportunity to visit Norway a decade ago and then to return this summer with my colleagues at the U.S. Department of Energy. It was exciting and inspiring to see the progress that has been made and to visit a project of such ambition and global importance as Northern Lights.

So, on behalf of the Department of Energy, we’re grateful for Norway’s valuable national leadership and international contributions to multilateral efforts to advance carbon management, including carbon dioxide removal, and for the strong bilateral collaboration we’ve enjoyed over the years. 

I also want to thank the European Union and member countries for their growing efforts to advance carbon management. 

We are excited about developments in carbon management and industrial decarbonization more broadly in the EU, especially the Innovation Fund, which will support nearly a dozen large-scale carbon capture and storage projects.  That is powerful recognition that carbon management is a critical component of our climate technology toolkit – and an important signal that these technologies will play an essential role in Europe’s climate mitigation efforts.

The development of important projects in EU member countries represents another important sign of progress. A great example is the Porthos project in the Netherlands, which will create a hub for capturing industrial CO2 emissions at the Port of Rotterdam and storing those emissions in depleted North Sea gas fields.  And the Aramis project – also in the Netherlands – will develop an infrastructure network to transport CO2 for offshore geologic storage.

There’s also growing support for deployment of carbon management in other EU countries that have not traditionally pursued that option.  For instance, Denmark is developing a carbon capture and storage strategy, with two key Danish projects under development.  And Bulgaria is pursuing its first project, supported by the Innovation Fund.

So, clearly, we’re seeing important movement on carbon management and CCUS in Europe.  And we look forward to seeing other EU member states and regions join in this effort.

In the United States, we’re also ramping up our efforts to accelerate the deployment of commercial-scale carbon capture and carbon removal projects and regional CO2 transport and storage hubs on a trajectory consistent with meeting our economywide net-zero target established by President Biden.  I will focus for a few minutes on some of the key policy developments driving those efforts. 

I’d like to begin on a personal note.  Prior to joining the Department of Energy, I spent two decades working with industry, NGOs, unions, and government officials to help advance carbon management policy and technology at the federal and state levels in the U.S.  During that time, I traveled frequently to European and other countries and participated in discussions about our aspirational efforts in the United States to implement a federal climate policy.

The United States has long been a leader in research, development and early commercial demonstration of carbon capture technologies, CO2 transport and geologic storage but, until recently, we lacked the funding and financial incentives necessary to commercialize and widely deploy carbon management technologies and infrastructure at truly climate scale. 

Now, I am pleased to report that we are doing our part and getting our own house in order in terms of federal climate policy commitments, which we are now actively beginning to implement.

Last year Congress passed and President Biden signed the Bipartisan Infrastructure Law, which provides US $62 billion over five years to the Department of Energy for research, development, demonstration and deployment of clean energy technologies and infrastructure. Of that total, $12 billion will be dedicated to projects across the carbon management value chain. 

Importantly, for the first time, this funding explicitly prioritizes, not just research and development, but fully commercial scale demonstration of technologies critical for meeting our climate goals.

This represents the largest carbon management funding commitment of any country in the world to date. However, in deference to our hosts here in Oslo, I must acknowledge that the commitment of our Norwegian friends to the Northern Lights project is much larger on a per capita basis.

$2.5 billion of this funding in the Bipartisan Infrastructure Law will help deploy at least six commercial-scale carbon capture demonstration projects, including two for industrial facilities, two for natural gas power generation, and two for coal-fired power plants.

The legislation also institutionalizes the same regional hub development approach we are seeing evolve here in Europe. For example, there is a $3.5 billion provision to support the development of four regional direct air capture hubs, each of which must be able to capture and store at least one million metric tons of CO2 captured annually from ambient air.

And there is $8 billion for the development of four or more regional hubs to demonstrate commercial scale production, transport, storage and end uses of clean hydrogen, and at least one of those hubs will prioritize hydrogen production from natural gas coupled with carbon capture and storage.

Consistent with the strategic emphasis on hubs, the legislation will also allow us to build out regional CO2 transport and storage infrastructure across the country to enable economywide deployment of carbon capture, carbon conversion and direct air capture projects. This will provide the shared infrastructure needed to achieve economies of scale for multiple facilities and industries—and, again, to allow us to bring carbon management to climate scale.

Toward that end, $2.5 billion is available to help support the feasibility, siting, permitting, and construction of an estimated 20-40 large-scale dedicated regional geologic storage sites, each of which must be capable of receiving a minimum of 50 million metric tons of CO2 over 30 years. Many sites will ultimately store much more.  

Complementing our expanded geologic storage program will be the Carbon Dioxide Transportation Infrastructure Finance and Innovation Authority, or CIFIA, which will be administered by the Department of Energy’s Loan Program Office. Through $2.1 billion in low-interest loans, CIFIA will leverage much greater sums of private capital to jumpstart the financing of CO2 transport infrastructure, knitting together future carbon capture and direct air capture projects with regional geologic storage sites.

CIFIA also gives us the authority to make grants to build extra capacity up front, ahead of demand, so that future carbon capture project developers can plan and invest, knowing that capacity to transport CO2 will be available.

Finally, although the program will build on the over 8,000 km of CO2 pipelines already operating in the U.S., CIFIA is about more than CO2 pipelines.  It will also serve as a tool for financing rail, ship, barge, truck and intermodal infrastructure to enable CO2 transport at regional scale. We will be looking carefully at evolving CO2 transport projects here in Europe as we expand our own efforts beyond CO2 pipeline projects.

I think it’s important to note here that CO2 transport represents an important example of how leadership here in Europe has helped to inspire greater policy ambition and action in the U.S. When it came to developing an innovative and effective carbon dioxide transport and storage program in U.S. federal legislation, we looked to two European projects to inform our efforts—Northern Lights here in Norway and Porthos in the Netherlands. 

While our national infrastructure legislation represents an unprecedented federal to support carbon management projects, the Inflation Reduction Act, which Congress passed and the president signed just this August, takes U.S. policy commitments a major step further. The legislation provides several hundred billion dollars for a broad portfolio of tax credits, which will attract private capital to invest in clean energy and industrial projects. 

In particular, the legislation dramatically expands and improves the 45Q tax credit program to incentivize carbon capture, carbon conversion and direct air capture projects. It increases the value of the credit up to $85 per metric ton for industrial and power generation projects that capture and store their CO2 emissions and up to $180 per ton for direct air capture projects. The legislation expands 45Q eligibility to all but the smallest projects and provides a ten-year window for the private sector to plan and invest, with eligibility for any project that begins construction by the end of 2032. Finally, the credit will be available for the first five years as a direct cash payment, greatly expanding access to and lowering the cost of private-sector financing.

These improvements will leverage private investment in projects supported by DOE through the infrastructure bill, and they will ultimately allow many more carbon management projects to move forward in the commercial market without federal funding.

So, taken together, the Bipartisan Infrastructure law and the Inflation Reduction Act represent the first-ever comprehensive U.S. federal policy framework for carbon management technologies and infrastructure needed to help achieve a net-zero emissions economy by the middle of this century.

In fact, we expect the legislation to enable total U.S. emissions reductions of up to 40 percent by 2030. And analysis commissioned by the Clean Air Task Force estimates that the combination of federal carbon management spending and enhancements to the 45Q tax credit could lead to deployment of carbon capture and storage capacity of 210-250 million metric tons annually in the U.S. by 2035.

The unprecedented scale of what we are embarking on the U.S. means that our focus cannot just be on getting the funding out the door and the tax incentives in place. How we implement projects and infrastructure is critical. This means engaging and communicating intensively with communities, stakeholders and state, local and tribal officials.

And that’s particularly important when it comes to communities adjacent to energy and industrial facilities that have long borne the brunt of pollution.  A key part of our decision-making regarding which projects we support will be whether those projects will provide tangible improvements in the environmental and economic circumstances of those communities.

Similarly, we are asking applicants for funding to demonstrate their commitment to providing quality jobs, ensuring high workplace standards, and supporting local workforce development.

In short, we are requiring that project developers incorporate an unprecedented level of community and stakeholder engagement and input and that communities and stakeholders have clear opportunities to shape the design and development of projects that impact them directly.

So, for the first time, we have in place the federal funding, tax credits and other policy tools in the U.S. to help incentivize private sector investment and development, providing an historic opportunity to commercialize and deploy carbon management solutions. 

In the weeks since the passage of the Inflation Reduction Act, I have spoken with a number of European colleagues in government, industry and NGOs. They welcome the U.S. commitments on climate, clean energy and industrial decarbonization in the Bipartisan Infrastructure Law and the Inflation Reduction Act. At the same time, they have expressed concern about investment flowing out of Europe and into projects in the U.S.   

We see these domestic policy commitments in the U.S. as an opportunity for countries in Europe and around the world.

As we have seen with wind, solar and other low and zero-carbon technologies, national policies that significantly accelerate deployment, innovation and cost reductions in one country also help to significantly reduce the costs of deployment for everyone. This is especially important in developing countries where urgent domestic needs of energy access and affordability make it even more challenging to deploy carbon management.

Also, just as bold CO2 transport and storage commitments made by our European partners directly inspired corresponding commitments in U.S. infrastructure legislation, recent progress in recent U.S. energy and climate legislation can help to spur a cycle of increasing climate ambition and further commitments here in Europe and other parts of the world.

This ”friendly competition” in the race to deploy carbon management solutions will also provide new opportunities for expanded transatlantic partnerships. And we welcome the opportunity to strengthen our engagement with you in Europe through our many bilateral and multilateral partnerships.

So, again, thank you for having me today. And I look forward to working with you as we move ahead.