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Today’s interview is with Mariam Al-Shamma, Director, Energy Program, Bipartisan Policy Center.
What is the Bipartisan Policy Center?
For those unfamiliar, what is the Bipartisan Policy Center, and how does your work support climate solutions like carbon dioxide removal (CDR) in today’s political landscape?
The Bipartisan Policy Center (BPC) is a Washington, D.C.-based think tank that drives principled solutions through rigorous analysis, reasoned negotiation, and respectful dialogue. By bringing together Republicans and Democrats—and providing them with the space, policy insights, and evidence-based research needed to negotiate in good faith—BPC helps turn ideas into passable, durable laws.
BPC’s Energy Program is focused on ensuring access to reliable, affordable, and clean energy. We advance federal policies to boost our economy, make America more secure, and tackle climate change—all while keeping the U.S. a global energy leader. CDR is an important piece of this energy and emissions puzzle and builds on a legacy of U.S. innovation and leadership in the energy technology space. BPC is supportive of the federal policy and programs that have fostered the emergence of a domestic CDR industry that is supporting local economies and creating jobs across the United States.
The 45Q Tax Credit
The 45Q tax credit was preserved and enhanced in the budget reconciliation bill passed in July. From BPC’s perspective, how does 45Q accelerate both carbon capture and CDR projects?
H.R. 1, the One Big Beautiful Bill Act, maintained the 45Q tax credit for carbon capture and direct air capture, with two significant changes. First, the reconciliation bill established parity for carbon dioxide storage and utilization (including for enhanced oil recovery). Previously, carbon utilization received a lower credit value. Second, the bill imposed new Foreign Entity of Concern (FEOC) restrictions that disallow taxpayers classified as a “Prohibited Foreign Entity” from a covered nation (i.e., China, Iran, North Korea, or Russia) from receiving the credit. Importantly, the bill maintained transferability, which allows entities to transfer all or a portion of a tax credit to a third-party buyer in exchange for cash.
The introduction of parity for carbon utilization and storage was a win for carbon capture and removal advocates, as it allows greater operational flexibility, particularly in locations where storage is not immediately available. Moreover, the preservation of the credit through 2032 provides project developers with the long-term certainty they require to secure financing and make final investment decisions.
Federal Carbon Policy
Which areas of federal carbon management policy do you see as most resilient to political shifts?
The U.S. Department of Energy (DOE) has a long history of supporting R&D and innovation across a range of energy technologies and across Congresses and administrations. While some programs supporting carbon management are likely to be wound down or retooled, DOE will likely continue to direct funding and resources to baseline R&D and innovation that benefit the carbon dioxide removal industry. Moreover, as we saw with 45Q in the reconciliation bill, programs and incentives that support both carbon removal and carbon capture are likely to be more politically resilient. This could also extend to efforts to build out enabling infrastructure for carbon removal, such as carbon dioxide pipelines and storage.
Industrial CDR
CDR is increasingly integrated with industrial decarbonization efforts. In what ways can CDR technologies be integrated with industrial processes to enable carbon removal?
There are myriad opportunities for CDR technologies to be harnessed in a range of industrial sectors, including but not limited to mining, wastewater treatment, and materials processing – in a way that is cost-effective and in fact represents an improvement to operational efficiency. In these cases, the removal of the carbon can sometimes become the co-benefit of the activity rather than the main purpose. For example, in the wastewater treatment sector, limestone (calcium carbonate) can be used to manage the alkalinity level while capturing carbon dioxide and converting it into environmentally inert bicarbonate. More education – and in some cases, the removal of regulatory barriers or establishment of supportive policy – is needed to accelerate integration of CDR into industrial processes and enable at-scale deployment.
Demand-Side Policy
Public procurement, advanced market commitments, and voluntary standards are evolving quickly. How is BPC working to shape demand-side policy that ensures integrity and scale for CDR?
As you note, scaling high-integrity CDR will require concerted efforts to create a robust and growing market for removals. CDR is a public good and, as such, lacks a built-in market. BPC has identified several federal policy levers that could be used to built up this market. These options range from direct federal procurement of CDR to efforts to strengthen the monitoring, reporting, and verification (MRV) frameworks for CDR, which would indirectly bolster the emerging market for CDR credits.
Best Practices
BPC has convened roundtables on CDR procurement pilots. What emerging best practices are informing demand-side policy design, such as contracts, co-benefits evaluation, or transparency measures?
Demand-side policies and programs must often balance opposing goals: fostering innovation while minimizing financial risk for taxpayers; making space for new technologies that have the potential to scale in the future while supporting the pathways that are removing carbon today; tolerating different levels of certainty while setting a bar for quality and integrity. What we are learning is that there is a lot of value in having a common understanding of criteria and standards for high-quality credits, even if specific requirements vary by use case.
Into The Future
Looking ahead, what is the single largest policy barrier to scaling CDR and carbon capture to gigatonne levels, whether it’s demand certainty, permitting, or finance, and what mixed-partisan strategies can help overcome it in 2025?
In order to scale to gigatonne levels, the CDR industry needs all of the pieces you mentioned to fall into place: demand certainty, permitting, and finance. Of these, permitting reform is the most likely to gain traction in Washington in the near term. With data centers and electrification contributing to higher energy demand and increasing electricity prices, policymakers across the political spectrum recognize the need to address permitting roadblocks for the energy sector broadly – with a political bargain to be made among those who prioritize conventional energy development and those who advocate for lower-emission or carbon-free energy. Carbon removal projects and enabling infrastructure are likely to benefit from these broader efforts to streamline regulations and improve transparency, which in turn will reduce timelines for development and provide investors with greater certainty.
