Tax incentives: CCUS Investment Tax Credit (ITC) Project funding: 2021 budget (C$319 million) for CCUS R&D Carbon price: federal and provincial systems Framework for fuel: Clean Fuels Regulation Tax incentives: IRA-enhanced 45Q, 45Z1 Project funding: various Department of Energy funding awards Carbon price: varies by state Framework for fuels: Low Carbon Fuels Standard (California only) Carbon price: EU ETS Project funding: EU Innovation Fund R&D funding: Horizon Europe, European Innovation Council Framework for fuels: Renewable Energy Directive (RED III); ReFuelEU Aviation; ReFuelEU MaritimeFramework for fuels: incentives and mandates for SAF and bioethanol Carbon price: Australian Carbon Credit Units (ACCU)Carbon price: UK Emissions Trading Scheme (ETS) R&D funding: UK Research and Innovation (UKRI) Framework for fuels: SAF MandateProject funding: CCU action plan (2025) R&D Funding: CCU action plan (2025) Carbon price: Korea ETSTax incentives and carbon price: Japan ETS from 2026 Project funding: Green Innovation Fund ($3.9 billion over 10 years) Framework for fuels: 2025 Strategic Energy Plan Relative scale of CCU policy and regulatory coverage The state of CCU policy 2.1 The regions with CCU policy frameworks and regulatory coverage are shown in Figure 6, together with relevant examples. The map is not exhaustive. Global distribution of CCU-relevant policy frameworks FIGURE 6 Notes: 1. Refers to US Inflation Reduction Act (IRA), sections 45Q (carbon oxide sequestration tax credit) and 45Z (clean fuel production tax credit). Source: Wood Mackenzie Lens Carbon. North America The US tax code is a leading driver of CCU investment, particularly section 45Q of the Inflation Reduction Act (IRA), which provides a tax credit for CO2 captured and either utilized or stored. Under the IRA in 2022, the value of the utilization credit was first increased from $35 to $60/tonne for utilization of point source CO2 and $35 to $130/tonne for atmospheric CO2.36 The IRA also introduced direct pay and transferability provisions, which have been helpful for projects in raising capital. Further to this, the 2021 Infrastructure Investment and Jobs Act (IIJA) introduced capital support for DAC hubs ($3.5 billion) and hydrogen hubs ($8 billion), as well as a suite of CCUS-related research programmes.37 Defossilizing Industry: Considerations for Scaling-up Carbon Capture and Utilization Pathways 14

Defossilizing Industry Scaling-up CCU 2025