Lawmakers and the White House may soften a major clean energy component of Democrats’ climate change and social spending legislation in a bid to overcome objections from Sen. Joe Manchin, two people familiar with the discussions said on Wednesday.
The changes under consideration could make it easier for coal and natural gas power plants to receive billions of dollars in financial incentives for clean energy, a potential boon for fossil fuel producers in Manchin's home state.
But that shift could bring objections from progressive Democrats who want to see the incentives hasten the nation's transition to greener sources. Under the proposed change, as long as coal and gas plants were equipped with technology to capture their greenhouse gas emissions, they could qualify for a plan that would pay power companies to deploy more renewable power and impose fines on those that don't.
Climate advocates consider that effort, called the Clean Electricity Performance Program, one of the core elements of Democrats' effort to speed the transition toward solar and wind power and slash greenhouse gas emissions. But Manchin (D-W.Va.) has raised issues with the concept both publicly and privately, putting its inclusion in any final compromise reconciliation bill in doubt.
The people familiar with the discussions said lawmakers and the White House could raise the program’s carbon emissions factor, a figure that determines which power plants would qualify as clean energy. Increasing that figure from the level of 0.1 metric ton of carbon dioxide equivalent per megawatt-hour that was approved by the House Energy and Commerce Committee could enable natural gas and coal-fired power plants outfitted with carbon capture equipment to qualify for payments, which could help win over Manchin.
“That number is movable,” one of the people said.
The other person said the conversation is linked with a separate discussion that would change eligibility requirements for a tax credit that would offer incentives to carbon capture and storage technology. The person said changes to that tax credit, known as 45Q, would not on their own be enough to convince companies to launch new projects — unless the CEPP was altered to make it easier for coal power plants outfitted with carbon capture to participate.
President Joe Biden has pledged to put the country on a path to reduce its greenhouse gas emissions 50 to 52 percent below 2005 levels by 2030. He also wants to reach net-zero emissions on the power grid by 2035.
Biden’s climate platform allowed for the deployment of carbon capture and storage technology, which proponents say would prevent heat-trapping gases from reaching the atmosphere. While that technology is not yet economically viable on its own for the U.S. power sector without subsidies, labor unions connected to the energy industry favor the technology, saying it could provide jobs even as the nation transitions to cleaner fuel sources.
Several of those unions sent a letter on Friday that was obtained by POLITICO to House Speaker Nancy Pelosi and Majority Leader Chuck Schumer, calling for the CEPP to better accommodate carbon capture technology.
But some environmental groups dismiss carbon capture as a false solution for fighting climate change, complaining that it would prolong the use of fossil fuels that would still cause local pollution problems from extracting oil, coal and natural gas.
“We’ve been very clear that we need to hold it” at current levels, said Lauren Maunus, advocacy director with the Sunrise Movement.
A spokesperson for the House Energy committee did not comment on the whether the carbon emissions factor was the topic of discussions.
“Chairman (Frank) Pallone is focused on enacting the most robust clean energy investment program possible, and he is continuing to work with other congressional leaders to make that happen,” the spokesperson told POLITICO in a statement.
Along with the CEPP, Democrats in the House are seeking to expand tax credits for renewable power, upgrade the nation’s network of electric transmission lines to better accommodate new solar and wind farms, and spend billions of dollars to grow the charging infrastructure for electric vehicles.
Democrats are also calling for imposing a fee on methane emitted by the oil and gas industry as well as new money to launch a Climate Conservation Corps, provide grants for environmental justice and expand home energy efficiency and appliance electrification rebates.
