The Kemper County Energy Facility carbon capture facility in Mississippi could receive hundreds of millions to billions of dollars in subsidies if the federal 45Q carbon sequestration tax credit is extended, Friends of the Earth and Taxpayers for Common Sense said in a report Tuesday.
The 45Q tax credit is worth $20 per ton of CO2 captured for geologic storage and $10 per ton for CO2 captured and used in enhanced oil recovery. The program currently is due to expire once 75 million tons of credits have been used; however, lawmakers in both chambers of Congress have introduced measures to make the credit permanent, eliminating the 75-million-ton cap and increasing the credit to as much as $35 per ton of carbon captured for utilization and $50 per ton captured using permanent geologic carbon storage.
Action is possible in the current lame-duck session of Congress, the nongovernmental groups warned.
Meanwhile, owner Mississippi Power says the Kemper facility is due to reach full operation by Dec. 31 of this year, more than 2 ½ years after its initial planned start date of May 2014. The plant’s cost has also skyrocketed from $2.4 billion to up to $6.9 billion, according to Mississippi Power’s filing last month with the U.S. Securities and Exchange Commission.
“This disaster is billions of dollars over budget and years behind schedule,” Lukas Ross, climate and energy campaigner at Friends of the Earth, said in a press release. “Kemper is a stark reminder of why carbon capture and sequestration is a waste of our tax dollars and a false solution to the climate crisis.”
The report includes the following findings:
- Legislation from Rep. Mike Conaway (R-Texas) would eliminate the expiration of the tax credit and provide Mississippi Power parent utility Southern Co. with $4.5 billion over the plant’s lifetime.
- Heidi Heitkamp’s (D-N.D.) legislative amendment on the credit would mean $695 million for Southern Co. over the initial decade of operations at Kemper.
- A bill submitted by Heitkamp and Sen. Sheldon Whitehouse (D-R.I.) to extend the credit would provide $1 billion for Southern Co. during Kemper’s first 12 years of operation.
- Kemper would receive roughly $102.8 million from the credit from 2017 to 2019 even if the 45Q program is not extended.
