Opportunities for federal leadership: Energy innovation, commercialization, and deployment

The policy brief outlines federal leadership opportunities to bolster U.S. energy security and global competitiveness through the deployment of carbon capture and storage (CCS), advanced nuclear fission and fusion, and superhot rock geothermal energy. It emphasizes the need to bridge the "missing middle" investment gap—where projects are too large for venture capital but too risky for institutional investors—by utilizing a combination of R&D funding, demonstration grants, and extended tax credits. Key recommendations include increasing the 45Q tax credit to $120, extending tech-neutral credits (48E and 45Y) through 2040, and streamlining permitting for CO2 pipelines and Class VI wells. The brief also calls for scaling the nuclear supply chain, modernizing spent fuel policy, and establishing a Geothermal Center for Excellence to ensure the U.S. maintains a competitive edge against international mechanisms like the EU's Carbon Border Adjustment Mechanism.

• To achieve market liftoff for carbon capture and storage (CCS), the U.S. should increase the value of the 45Q tax credit to at least $120 and maintain the Greenhouse Gas Reporting Program (GHGRP) for monitoring and verification.
• CCS is presented as a strategic necessity for U.S. industry to remain competitive against international carbon costs, specifically citing the European Union's Carbon Border Adjustment Mechanism (CBAM) and Japan's planned carbon levy.
• The deployment of advanced nuclear fission requires scaling the supply chain through a centralized entity for construction management, extending 48E, 45Y, and 45X tax credits through 2040, and implementing 'orderbooks' to reduce costs through replication.
• To ensure the long-term viability of nuclear energy, the federal government must overhaul spent fuel policy by working with states to identify storage locations and exploring multiple geologic repository pathways, including consolidated interim storage.
• Commercial fusion energy is identified as a national strategic priority for energy independence; the document recommends expanding the Milestone-Based Fusion Development Program and amending the 45X Advanced Manufacturing Production Credit to include fusion components.
• Superhot rock geothermal is highlighted for its immense potential, with an estimate that 1% of U.S. potential could generate 4.3 terawatts of clean firm power, which is 8 times the 2022 U.S. electricity consumption.
• The document identifies a "missing middle" investment gap where large-scale infrastructure projects are too risky for banks but too expensive for venture capital, requiring policies that create "systemic bankability" to attract private investment.

APA

tshaheen (2025). Opportunities for federal leadership: Energy innovation, commercialization, and deployment. Clean Air Task Force. https://www.catf.us/2025/05/opportunities-for-federal-leadership-energy-innovation-commercialization-and-deployment/

Chicago

tshaheen. Opportunities for federal leadership: Energy innovation, commercialization, and deployment. Clean Air Task Force, 2025. https://www.catf.us/2025/05/opportunities-for-federal-leadership-energy-innovation-commercialization-and-deployment/.

Wikipedia

{{cite report |last1=tshaheen |title=Opportunities for federal leadership: Energy innovation, commercialization, and deployment |publisher=Clean Air Task Force |date=19 May 2025 |url=https://www.catf.us/2025/05/opportunities-for-federal-leadership-energy-innovation-commercialization-and-deployment/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{tshaheen2025opportunities, author = {tshaheen}, title = {{Opportunities for federal leadership: Energy innovation, commercialization, and deployment}}, institution = {Clean Air Task Force}, year = {2025}, month = may, url = {https://www.catf.us/2025/05/opportunities-for-federal-leadership-energy-innovation-commercialization-and-deployment/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }