Questions mount about efficacy of US tax credits for coal cleansing
Share this post
Combustion Industry News Editor
Democratic senators in the USA are pushing for the General Accountability Office to investigate US$1 billion (€896 million) given in tax credits to coal-fired power plants employing certain chemical coal cleaning technologies. A report from Reuters in December last year, building on work from Resources For The Future, questioned the efficacy of the technology, which is designed to reduce emissions of SOx, NOx and mercury. Resources For The Future’s work found that at plants employing the cleaned coal, SO2 emissions showed negligible reductions, and NOx and mercury reductions were only half those required to receive subsidies. According to the Forbes report, the tax credits are given when the coal cleansing is proven to work at lab scale, rather than in practice at industrial scale, and there is an apparent discrepancy in functioning at the two scales. Numerous companies have advised utilities to tap into the credit, including Berkshire Hathaway, Fidelity Goldman Sachs, JP Morgan Chase, PPL Corp., Mylan and insurer Arthur J. Gallagher, while other utilities have tapped directly into the credit. Originally introduced in 2004, it was once slated for removal from the law, but was subsequently extended to such that it expires in 2021. While no wrongdoing seems to have occurred, the subsidy does not appear to be resulting in the aim of reducing emissions considerably, suggesting that it may be scrapped in future, though this may be dependent on the result of this year’s presidential election.