Harmonizing Regulatory Frameworks: Unlocking Carbon Capture and Storage Potential under the Inflation Reduction Act

This article analyzes the regulatory landscape for carbon capture and storage (CCS) in the United States, focusing on incentives introduced through the Inflation Reduction Act (IRA) and Section 45Q tax credits. This focus does not overlook other key related legislation. It does, however, underpin the core thrust of this article that while several federal policies offer significant financial support for and incentives to accelerate CCS deployment, the very multiplicity and fragmentation of these regulations and policies across federal and state levels poses barriers to scalable adoption. Additionally, CCS faces competition from other clean energy technologies, which are also incentivized under the IRA, potentially diverting resources and focus. Through a comprehensive policy review, this study identifies regulatory conflicts and financial disincentives that hinder CCS’s potential. It argues that, despite federal support, the absence of cohesive, standardized regulations continues to significantly limit CCS’s emission reduction capabilities, especially in industries where decarbonization is inherently difficult. The findings underscore the importance of harmonizing CCS regulations to streamline permitting processes and address jurisdictional inconsistencies. By aligning federal and state policies, policymakers can better support CCS in achieving the U.S.’s climate goals, particularly for industries with limited alternatives for emission reduction.