Cementing the Case for CCS and the 45Q Tax Credit
Quick Summary
- The 45Q tax credit supporting carbon capture and storage (CCS) can deliver significant economic and environmental benefits.
- An FTI Consulting analysis shows that in the cement sector alone, the 45Q credit is associated with 7,500 jobs per year and $1.8 billion in economic impact.
- FTI Consulting’s research shows voters are more likely to support CCS when it is associated with new, high-paying jobs, providing a natural opportunity for further analysis in sectors beyond cement.
CCS has gained traction, particularly in the United States, as a promising tool for reducing emissions in heavy industrial sectors that cannot be easily abated, like cement production, steel manufacturing, and the chemical industry. [1],[2]
U.S. industry is already looking to seize on the promise of CCS by integrating the technology into their operations and create new value from captured carbon dioxide (CO2). In fact, there are 152 CCS projects are currently being proposed across the United States, which span power generation, cement production, chemicals, natural gas processing, and other emissions-intensive industries.[3]
At least 52 new CCS projects – representing nearly 53 million metric tons (MMT) per year of capture capacity – have been announced following the 2022 expansion of the Section 45Q tax credit under the Inflation Reduction Act (IRA).[4] The Section 45Q tax credit – originally created by Congress in 2008 – is a performance-based federal incentive awarded to CCS projects for each ton of CO2 that is captured and either permanently stored underground or used in industrial processes.[5]
While this critical decarbonization technology has bipartisan policy support and strong private sector momentum, the future of the Section 45Q tax credit remains uncertain as budget negotiations are underway with Congress. Members of Congress are currently exploring significant cuts to federal spending, and clean energy incentives that were created or enhanced by the IRA – including 45Q – have been widely discussed as potential cuts.[6]
Supporters of these incentives are emphasizing the economic benefits they have delivered.[7] While much of the focus has been on tax credits for energy sources such as wind and solar, the 45Q credit has received comparatively less attention. But it is possible to put numbers to the broader value of 45Q in terms of jobs and economic output.
Based on findings from FTI Consulting’s research, the cement industry provides a powerful illustration of how carbon capture projects can deliver both significant economic opportunities and emissions savings. For the purposes of our case study, we assumed that CCS projects for the cement sector would not advance without the 45Q tax credit. In the absence of this incentive (or a price on CO2 emissions, which is not currently on the table in the United States), there is little economic case for the added cost of capturing and sequestering CO2.
FTI Consulting’s Cement Industry Case Study
Cement forms the backbone of America’s built world – it helps form our roads, bridges and other key infrastructure. The United States has a large cement production industry; in 2023, the United States produced 88 million tons of Portland cement across 99 plants in 34 states, with Texas, Missouri, California, and Florida leading production volumes.[8]
The cement industry currently accounts for about 1.5% of U.S. emissions.[9] Historically, the cement industry was one of the hardest sectors to decarbonize due to both its reliance on oil and gas, and limestone’s emissions profile – one of the primary ingredients for cement’s end-product. More than 85% of the emissions from cement production is derived from calcination (the chemical reaction that takes place at ultra high temperatures which decomposes limestone into lime) and the combustion of oil and gas to heat the kiln that produces the ultra-high temperatures needed for the calcination process.[10]
Carbon capture can change that. By adding carbon capture technologies, cement producers can drastically reduce their emissions footprint. According to one estimate, embracing CCS could reduce global cement production emissions by an estimated 36%.[11]
However, significant investment is required. A representative greenfield cement facility with 90% carbon capture capacity would require a capital investment of approximately $323 million.[12] While that figure may sound steep from the outset, investments in CCS capacity at cement production facilities have a ripple effect.
If 6.6 million metric tons per year of carbon capture capacity were added to cement facilities – equivalent to the estimated total carbon capture capacity planned for cement facilities announced since the IRA was passed – there would be demonstratable economic benefits.[13] Nearly a quarter of the investment in adding this carbon capture capacity would be related to construction labor,[14] meaning the economic ripple effect will be substantial in the regions where these projects are developed, driving GDP back into the surrounding communities by way of increased commerce in local supply chains.
On average, cement-sector CCS projects alone could:
- Support approximately 7,500 jobs annually across construction, manufacturing, supply chains, and consumer spending impacts.
- Generate roughly $1.8 billion in annual economic output.
- Contribute nearly $215 million in tax revenue at the federal, state, and local levels each year.
Engaging the Public on the Economic Benefits of CCS
To advance CCS in the United States, industry – including cement – will need to lean into messaging that most deeply reaches voters and community members.
FTI Consulting’s recent polling of voters on their opinions of CCS revealed a powerful messaging opportunity – job creation.[15] Voters on the fence about CCS are most likely to be swayed by economic arguments, particularly in states where heavy industries play a key role like Texas and Louisiana. According to FTI Consulting’s findings, 60% of respondents were more likely to support CCS when it was connected to new, high-paying jobs in the community where the project is built.
By highlighting the direct employment supply chain benefits of CCS projects at the local level – including construction, long-term operations, and vendor procurement – supporters can make the case that CCS is not just a decarbonization solution, but an economic workforce driver.
The Path Forward
The CCS industry is at a pivotal moment. Investment and initial policy momentum are on its side, but that hinges on certainty around the 45Q tax credit.
CCS has the potential to spur growth and investment in critical domestic industries like cement. Voters support CCS the more they understand it, and the bipartisan foundation for the industry is already in place. Data show that connecting CCS to new job creation will strengthen that base of support.
But it is important to put clearer numbers into that discussion. Broad promises of economic growth and new jobs are less impactful than specifics. FTI Consulting’s short analysis for the cement industry reveals significant economic impact from CCS and the 45Q tax credit that supports it. Replicating that model across other sectors looking to deploy CCS would provide industry with even stronger proof points for the full value of this technology.
Related Expertise
References
[1] “Risk revealed by Lloyd’s Clean technologies and hard-to-abate sectors,” Lloyd’s Futureset, AON (copyright 2024, last accessed May 6, 2025), https://assets.lloyds.com/media/30f234cf-b83e-490b-a2ca-2e569e9783bf/Risk%20revealed%20by%20Lloyd’s%20-%20CCUS.pdf
[2] “Energy Technology Perspectives 2020, Special Report on Carbon Capture Utilisation and Storage,” International Energy Agency (IEA) (September 2020, last accessed May 6, 2025), https://iea.blob.core.windows.net/assets/181b48b4-323f-454d-96fb-0bb1889d96a9/CCUS_in_clean_energy_transitions.pdf
[3] “CCUS Projects Database,” International Energy Agency (IEA) (last updated April 2025), https://www.iea.org/data-and-statistics/data-product/ccus-projects-database
[4] Ibid.
[5] “Credit for Carbon Oxide Sequestration,” Federal Register: The Daily Journal of the United States Government (January 15, 2021), https://www.federalregister.gov/documents/2021/01/15/2021-00302/credit-for-carbon-oxide-sequestration
[6] Nick Sobczyk, “GOP’s Debate Intensifies over IRA Tax Credits,” Axios (February 5, 2025), https://www.axios.com/pro/energy-policy/2025/02/05/gops-debate-intensifies-over-ira-tax-credits
[7] Zack Budryk, “18 House Republicans Ask Johnson Not to Target IRA Clean Energy Tax Credits,” The Hill (August 7, 2024), https://thehill.com/policy/energy-environment/4815990-mike-johnson-ira-clean-energy-tax-credits/
[8] A. K. Hatfield, “Mineral Commodities Summary 2024,” (accessed April 30, 2025), https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-cement.pdf
[9] “The Pathway to Low Carbon Cement Commercial Liftoff,” U.S. Department of Energy (accessed April 30, 2025), https://liftoff.energy.gov/industrial-decarbonization/low-carbon-cement/#:~:text=Overview%20of%20the%20cement%20production,U.S.%20EPA
[10] “Industry Guide to Carbon Capture and Storage at Cement Plants,” U.S. Department of Energy (November 30, 2023), https://www.energy.gov/sites/default/files/2023-11/Industry%20Guide%20to%20CCS%20at%20Cement%20Plants_Nov%2029%202023_0.pdf
[11] Max Purton, “Cement Is a Big Problem for the Environment. Here’s How to Make It More Sustainable,” World Economic Forum (September 13, 2024), https://www.weforum.org/stories/2024/09/cement-production-sustainable-concrete-co2-emissions/
[12] Stephen Hughes and Amanda Zoelle, “Cost of Capturing CO₂ from Industrial Sources,” National Energy Technology Laboratory (July 15, 2022), https://www.netl.doe.gov/projects/files/CostofCapturingCO2fromIndustrialSources_071522.pdf
[13] FTI Consulting completed these modeling using IMPLAN Cloud modeling software, https://implan.com/, and using NETL’s cost breakdown of CCS equipment, construction and labor spend, and economic modeling (see supra note 10).
[14] Calculation derived from Exhibit 6-24, page 124 of PDF in Sydney Hughes, Alexander Zoelle, “Cost of Capturing CO2 From Industrial Sources,” National Energy Technology Laboratory (March 31, 2023), https://www.osti.gov/servlets/purl/2007619, by dividing total estimated direct labor cost ($76,381) by total plant cost ($322,871), which yields roughly 24%, or nearly a quarter.
[15] Steve Everley, Jefferson Caves, Andrew Batcheller and James Condon, “How to Capture the Bipartisan CCS Opportunity,” FTI Consulting Strategic Communications (March 19, 2025), https://fticommunications.com/how-to-capture-the-bipartisan-ccs-opportunity/
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