In this article for The Texas Lawbook, Energy Private Equity partners Chris Bennett and Omar Samji and associate Sarah George discuss the opportunities and challenges in the evolving CCUS space and the impact of regulatory uncertainty on these projects.
Key takeaways include:
- The Inflation Reduction Act, investor focus on ESG and other recent incentives have spurred rapid increases in carbon capture, utilization and sequestration (“CCUS”) activity since 2021.
- Significant M&A activity has also occurred in the CCUS space during this period, in particular in 2023.
- Despite this increase in activity, project development and deals, many of the legal and regulatory issues surrounding CCUS projects are still developing.
- EPA Class VI Permits for injection and sequestration of CO2 are currently serving as a bottleneck slowing down many of these CCUS projects, but several states are working towards primacy to help accelerate the issuance of these permits.