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WRI and Standard & Poor’s identified petrochemical, all other basic organic, and nitrogenous fertilizer producers as likely EPA regulatory priorities due to their absolute emissions and potential for reductions. However, the document notes that regulatory likelihood does not automatically imply negative credit impacts, as some facilities may already meet thresholds, certain reductions (such as N2O in nitric and adipic acid production) may be inexpensive, and the EPA may consider cost feasibility and facility lifespan to limit compliance costs.

The American Power Act (APA) would require facilities emitting over 25,000 tons of CO2 equivalent to hold emission permits, though energy-intensive, trade-exposed manufacturing subsectors would be eligible for free allowance rebates. WRI analysis indicates that eligible subsectors would receive enough free permits to cover all emissions for 2016 and several years following. Based on EIA projections across low, medium, and high permit price scenarios, most examined chemicals subsectors would experience only modest energy and compliance effects in the first year of compliance (2016).

The U.S. is leading global CCUS development, driven by the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, with over 120 projects in planning or construction. China is rapidly expanding its capacity, having commissioned its first million-ton project in 2022 and developing several large-scale demonstration projects. Both nations face significant barriers: the U.S. struggles with commercial bank financing and public perception, while China lacks a comprehensive regulatory framework and large-scale transport infrastructure. Under the Sunnylands Statement, the two countries aim to advance at least five large-scale cooperative CCUS projects each by 2030.