International Energy Agency (IEA) Executive Director Fatih Birol has praised the 2018 federal budget that he says could lead to a breakthrough in carbon capture technologies and help the world achieve its Paris Agreement obligations.
“There is one political move recently that I should say, I welcome this strongly,” Birol said with regards to the changes to the Section 45Q tax credit for carbon sequestration, that will increase tax credits from $10 for enhanced oil recovery and $20 for other forms of sequestration to $35 and $50 respectively.
The proposal was supported by the oil and gas industry that can pump CO2 into wells to further extract oil and gas, seal the wells, leaving emission underground, and therefore able to benefit from the credits.
Birol said carbon capture and storage is vital to climate efforts because fossil fuels will continue to play a significant role in the global energy mix for the foreseeable future. He highlighted the fact that fossil fuels contribute the same percentage of energy that it did 30 years ago at 81%.