The push to lower carbon emissions has prompted many governments and companies to announce ambitious carbon reduction goals, including the achievement of “net zero” emissions over the coming decades. As part of that push, our energy, industrial and transportation sector clients are considering ways to transition to less carbon-intensive operations over the next decade, including through the use of carbon capture, utilization, and storage (“CCUS”) technology and projects. Deployment of CCUS technology can help reduce the carbon intensity of power, oil and gas, and petrochemicals industry operations. CCUS technology and projects are also a critical component of the development of emerging low-carbon industries, including large-scale production of low-carbon hydrogen.
Baker Botts’ multidisciplinary teams are at the forefront of CCUS developments and activities, assisting clients with CCUS-related projects and transactions around the world. Our attorneys advised on the permitting of one of the first carbon capture facilities for a coal-fired power plant in the U.S. and have advised on the construction of post-combustion carbon capture sequestration projects. In the UK, our attorneys have advised on the adoption of pre-combustion CCUS technology for a coal-fired power station, and in the Middle East our attorneys have advised on a “blue” hydrogen project that incorporates carbon capture with hydrogen production.
In addition to advising clients on CCUS-related projects, we have also been involved in the development of the regulatory framework for CCUS at the federal and state level in the United States. We also helped pioneer the legal parameters for defining “pore space” for CCUS and served as an expert peer reviewer on the American Carbon Registry’s leading methodology for establishing carbon credits for carbon capture and storage projects.
We can support clients with all aspects of CCUS projects and transactions, including:
- Development of facilities and projects for CCUS infrastructure, including projects supporting thermal power production, pipeline infrastructure, enhanced oil recovery (“EOR”) and large-scale hydrogen production
- Drafting and negotiation of agreements, including:
- Engineering, procurement, and construction arrangements for CCUS technologies
- CCUS development and use arrangements (including CO2 capture, production, transportation, utilization, and storage in various forms)
- Feedstock and purchase agreements for captured carbon oxide
- Acquisition and leasing of pore space rights for onshore or offshore storage facilities
- Structuring CCUS projects and related joint ventures, including tax and partner structuring
- Comparative assessment of regulatory frameworks and liability and permitting regimes to inform siting decisions
- Patenting and licensing of CCUS technologies
- Addressing and advancing Environmental, Social and Governance (ESG) goals and strategy, including through use of CCUS projects
- Maximizing federal and state tax incentives for CCUS, including the section 45Q federal income tax credit
- Financing for CCUS projects at various stages
- Identifying environmental, health and safety regulatory issues, including:
- Permitting and compliance counseling;
- Assessment and management of potential environmental liabilities;
- Participation in the development of CCUS legislation and regulations; and
- Advising on carbon credit regimes and transactions.
Full-Service Coverage for CCUS
Our team of attorneys provides a full-service approach to assisting clients with innovative and complex projects of all sizes, from small technology start-ups to global infrastructure projects.
- Our Chambers Band 1 (2020) Energy Transactional and Project Development Practice assists industry players with the development and financing of capital-intensive energy projects around the world, including the structuring of partnerships and joint ventures, the financing of those projects, and the negotiation of commercial arrangements.
- Our Chambers Band 1 (2020) Tax attorneys work closely with all of our teams to provide advice on federal, state, and international tax issues and incentives, including carbon tax proposals, carbon capture tax credits (Section 45Q of the Internal Revenue Code), alternative fuel vehicle tax credits, and the monetization of such tax incentives.
- Our Technology and Intellectual Property Team, which is also ranked Chambers Band 1 (2020), provides full-service representation to technology companies of all sizes, including large multi-nationals, start-ups, universities, industry associations, and research consortia.
- Our Environmental, Safety and Incident Response Team advises clients on permitting, compliance, incident response, carbon credit regimes, litigation, and implementation of decarbonization strategies and projects.
- Our cross-disciplinary ESG Team uses subject matter and market experience to advise clients across the entire range of E, S and G, including advice on sustainability initiatives and strategy, climate risks and opportunities, ESG metrics and targets, climate resilience and scenario analyses, disclosure frameworks, preparation of materials for rating agencies, investor engagement, and relevant governance practices.
- Our Corporate and Mergers and Acquisitions Teams offer extensive and comprehensive experience across all facets of the strategic investment and private equity landscapes, including the purchase and sale of companies and assets, joint ventures and strategic alliances, tax and regulatory structuring advice, fund formation, and the integration and management of acquired companies and assets.
- Our Chambers Band 1 (2020)-ranked Energy Disputes Practice represents clients in both courts and international arbitrations, across the spectrum of energy-related disputes, including environmental liability disputes and actions, construction disputes, pricing disputes, and sale and purchase agreement disputes. We also provide advice during the contract negotiation stage, specifically relating to investment structuring, the drafting of dispute resolution provisions, and jurisdiction and choice of law issues.