Turbocharged: Supersized Subsidies for Carbon Capture & Hydrogen are a Giveaway to the Fossil Fuel Industry

This fact sheet from the Center for International Environmental Law argues that recent United States legislation, specifically the Infrastructure Investment and Jobs Act (IIJA) of 2021 and the Inflation Reduction Act (IRA) of 2022, provides excessive subsidies and regulatory support to the fossil fuel industry through carbon capture, hydrogen production, and federal land leasing.

• The Infrastructure Investment and Jobs Act (IIJA) of 2021 authorized over $17 billion for Department of Energy pilot programs. This includes $3.5 billion for four regional Direct Air Capture (DAC) hubs, $3.5 billion for carbon capture demonstrations and large pilots, and $8 billion for four regional "clean" hydrogen hubs, at least one of which must utilize fossil fuels with carbon management. Additionally, $2.1 billion was allocated to the Carbon Dioxide Transportation Infrastructure Finance and Innovation Program Account.
• The Inflation Reduction Act (IRA) of 2022 significantly increased the 45Q tax credits for carbon capture. When prevailing wage and apprenticeship requirements are met, the maximum available credits increase to $85/ton for sequestration storage (up from $50/ton), $60/ton for Enhanced Oil Recovery (up from $35/ton), $180/ton for DAC storage (up from $50/ton), and $130/ton for DAC EOR (up from $35/ton). The IRA also introduced direct pay and credit transferability for 45Q.
• The IRA established the Clean Hydrogen Tax Credit (CHTC), providing a credit per kilogram of hydrogen based on lifecycle greenhouse gas emissions. While the highest subsidy ($0.60/kilogram) is for "qualified clean hydrogen" with emissions under 0.45kgCO2e/kgH2, the credit still supports fossil hydrogen (blue hydrogen) produced from steam reforming methane with carbon capture. Furthermore, the IRA increased Department of Energy loan guarantee commitment authority by up to $250 billion through September 30, 2026, for energy infrastructure projects, including CCS.
• The IRA provides regulatory support for fossil fuel expansion by mandating lease extensions on federal lands where oil and gas is produced in paying quantities and requiring four specific lease sales in the Gulf of Mexico, including the reinstatement of lease sale 257. Additionally, the law links renewable energy development to fossil fuel leasing, preventing the Secretary of the Interior from issuing rights-of-way for onshore wind or solar projects unless specific oil and gas lease sales have occurred.
• The document asserts that CCUS and blue hydrogen are "loophole technologies" that lock in dependence on coal and gas. It cites the IPCC to claim that CCUS is one of the highest cost measures with the lowest potential to reduce emissions by 2030 and notes that CCUS projects have failed to capture even 1% of global emissions despite fifty years of industry experience.

APA

Center for International Environmental Law (2022). Turbocharged: Supersized Subsidies for Carbon Capture & Hydrogen are a Giveaway to the Fossil Fuel Industry. https://www.ciel.org/wp-content/uploads/2022/11/Turbocharged_-Supersized-Subsidies-for-CCS-Hydrogen-are-a-Giveaway-to-the-Fossil-Fuel-Industry-.pdf

Chicago

Center for International Environmental Law. Turbocharged: Supersized Subsidies for Carbon Capture & Hydrogen are a Giveaway to the Fossil Fuel Industry. 2022. https://www.ciel.org/wp-content/uploads/2022/11/Turbocharged_-Supersized-Subsidies-for-CCS-Hydrogen-are-a-Giveaway-to-the-Fossil-Fuel-Industry-.pdf.

Wikipedia

{{cite report |author=Center for International Environmental Law |title=Turbocharged: Supersized Subsidies for Carbon Capture & Hydrogen are a Giveaway to the Fossil Fuel Industry |date=October 2022 |url=https://www.ciel.org/wp-content/uploads/2022/11/Turbocharged_-Supersized-Subsidies-for-CCS-Hydrogen-are-a-Giveaway-to-the-Fossil-Fuel-Industry-.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{centerforinternationalenvironmentallaw2022turbocharged, author = {{Center for International Environmental Law}}, title = {{Turbocharged: Supersized Subsidies for Carbon Capture \& Hydrogen are a Giveaway to the Fossil Fuel Industry}}, institution = {Center for International Environmental Law}, year = {2022}, month = oct, url = {https://www.ciel.org/wp-content/uploads/2022/11/Turbocharged_-Supersized-Subsidies-for-CCS-Hydrogen-are-a-Giveaway-to-the-Fossil-Fuel-Industry-.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }