United States

US government policies on industrial decarbonisation

Net zero target Key climate policies Carbon pricing Hydrogen strategy Other policies Funding

Net zero target

Addressing the climate crisis requires scaling existing solutions, while investing in innovation to develop additional solutions, enabling multiple pathways to reach global net zero emissions. The US has established an economy-wide target of reducing its net greenhouse gas emissions by 50-52% below 2005 levels, by 2030. US climate policies and regulations demonstrate its commitment to the creation of quality work and jobs as an integral part of its efforts to combat climate change.

Timeline (5)

Further information: US NDC; The long-term strategy of US; 2030 GHG Target

Key climate policies

The Bipartisan Infrastructure Law (2021)

The Bipartisan Infrastructure Law (BIL) aims to tackle the climate crisis and advance environmental justice. The law includes more than $62 billion for the US Department of Energy (DOE) to deliver a more equitable clean energy future for the American people and includes over $10 billion for carbon capture, direct air capture, and industrial emission reduction.

In December 2021, DOE established a new Office of Clean Energy Demonstrations to oversee the $21.5 billion in BIL funding for clean energy demonstration projects using innovative technologies such as clean hydrogen, carbon capture, grid-scale energy storage, and advanced nuclear reactors.

The law earmarks:

$2.54 billion for the Carbon Capture Demonstration Projects Program
$2.1 billion for the Carbon Dioxide Transportation Infrastructure Finance and Innovation Program
$937 million for the Carbon Capture Large-Scale Pilot Programs
$310 million for the Carbon Utilization Program
$500 million for the Clean Energy Demonstration Program on Current and Former Mine Land including fossil-fuelled electricity generation with carbon capture, utilization, and sequestration

Further information: Bipartisan Infrastructure Law

Inflation Reduction Act (2022)

The most significant climate legislation in US history, the Inflation Reduction Act (IRA) fundamentally transformed the carbon capture landscape. With $369 billion allocated for clean energy and climate change mitigation initiatives, the IRA is expected to reduce America’s greenhouse gas emissions (GHG) by around 40%, compared to 2005-levels.

The bill supports the production of clean hydrogen. The size of the credit scales with the amount of emissions reductions, achieving a maximum of $3/kg-H2 for a project with near zero emissions.

The bill’s CCUS funding has:

Substantially increased the amount of 45Q credits for domestic CCUS projects
Made it easier for CCUS projects to qualify for 45Q credits
Provided significant new avenues for monetising 45Q credits
Extended the deadline to begin construction on 45Q credit-eligible projects from 2026 to 2033
Increased the value of 45Q credits to $85 per tonne for point source carbon capture

Further information: Inflation Reduction Act, Leading the way: America boosts industrial carbon capture

Carbon pricing

Regional Greenhouse Gas Initiative

The Regional Greenhouse Gas Initiative (RGGI) is the first market-based, cap-and-invest regional initiative in the US. Within the RGGI states, fossil-fuel-fired electric power generators with a capacity of 25 megawatts or greater ('regulated sources') are required to hold allowances equal to their CO₂ emissions over a three-year control period. It is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia to cap and reduce power sector CO₂ emissions.

RGGI is composed of individual CO₂ Budget Trading Programs in each participating state.

Further information: RGGI

California Cap-and-Trade Program

The Cap-and-Trade Program is a key element of California’s strategy to reduce GHG emissions. It complements other measures to ensure that California cost-effectively meets its goals for GHG emissions reductions. This regulation creates a powerful economic incentive for significant investment in cleaner, more efficient technologies. The California Cap-and-Trade Program (45Q) began operation in 2012 and the program applies to emissions that cover approximately 80% of the state’s GHG emissions.

Further information: Cap-and-Trade Program

Hydrogen strategy

Clean Hydrogen Roadmap and Strategy Learn More

2035 Clean Hydrogen Roadmap and Strategy

Before 2025:

Establish Clean Hydrogen Production Standard
Develop and optimize designs for hydrogen infrastructure in key applications, such as industry and energy storage
Identify regulatory and policy gaps to hydrogen production and end use, including for blue hydrogen
Lay regulatory groundwork for large scale clean hydrogen deployments across production, processing, delivery, storage and end-use
Identify regulatory, and policy gaps, and key strategies to address them
Develop streamlined guidance on hydrogen pipeline and large-scale project permitting with stakeholder engagement
Develop market structures and offtake agreements to accelerate progress
Initiate transition to clean hydrogen for hard-to-decarbonize industrial applications and identify specific locations for potential scale up (e.g., ammonia, refineries, steel)

Between 2026 and 2029

Deploy clean hydrogen from renewables, nuclear, fossil + CCS at scale
Deploy at least two Regional Clean Hydrogen Hubs, demonstrating hydrogen use in hard-to-decarbonize sectors (e.g., industry and heavy-duty transport)

Between 2030 and 2035

Produce at least 10 MMT/year of clean hydrogen by 2030
Design networks of hydrogen infrastructure optimized for regional supply and demand, in collaboration with local communities and stakeholders to maximize benefits and ensure energy, environmental, and equity goals are addressed
Utilize lessons learned from large-scale deployments to identify priority sectors for future growth
Launch at least one Regional Clean Hydrogen Hub demonstrating hydrogen use in energy storage
Develop market structures and regulatory guidance to enable clean hydrogen exports

Further information: Clean Hydrogen Roadmap and Strategy

billion

in hydrogen funding in Bipartisan Infrastructure Law Learn More

$9.5 billion in hydrogen funding in Infrastructure Law

DOE establishes BIL’s $9.5 billion clean hydrogen initiatives.
Public input is needed on new hydrogen hubs, clean hydrogen manufacturing programs to decarbonize industry, and transportation sectors.
Clean hydrogen is crucial to DOE’s strategy for achieving President Biden’s goal of a 100% clean electrical grid by 2035 and net zero carbon emissions by 2050.

Further information: Bipartisan Infrastructure Law

billion

towards developing four clean hydrogen hubs Learn More

$7 billion towards developing four clean hydrogen hubs

BIL authorizes and appropriates $8.0 billion over the five years encompassing fiscal years 2022 through 2026 for the development of at least 6-10 H2Hubs that:
- Aid achievement of the clean hydrogen production standard.
- Demonstrate the production, processing, delivery, storage, and end use of clean hydrogen.
- Facilitate the development of a national clean hydrogen network.
CCS is an integral part of the US Hydrogen strategy and at least one of the hubs will use fossil fuels as a feedstock along with CCS.

Further information: Biden-Harris Administration Announces Regional Clean Hydrogen Hubs to Drive Clean Manufacturing and Jobs

Other policies

The US Environmental Protection Agency has recently proposed new regulations which would require all large fossil fuel power plants to either use carbon capture technology by 2035, or to deploy low carbon Hydrogen to achieve equivalent emissions carbon by 2038. While likely to be subject to legal challenge, if implemented the regulations will provide a further incentive for deployment of carbon capture technology.

Funding

Recent CCUS funding

Funding Opportunity for CIFIA FGG Learn More

Funding opportunity (value TBC) to be confirmed in near future for carbon dioxide transportation infrastructure finance and innovation (CIFIA) Future Growth Grants (FGG).

Further information here

million

EERE Funding Opportunity Learn More

$83m for decarbonization of hard-to-decarbonize industrial sectors, such as chemicals and refining, iron and steel, cement and concrete, forest and paper products, food and beverage, glass and aluminum

Find out more here

Wider industrial decarbonisation funding opportunities

billion

towards climate change in the Inflation Reduction Act 2022 Learn More

$369 billion towards climate change in the proposed Inflation Reduction Act 2022

The IRA 2022 dedicates $369 billion to fight climate change. CCUS would see a major boost in 45Q credits with $3.2 billion dedicated to CCUS tax credits and enhancements made to 45Q.

Further information: Inflation Reduction Act