Economics

The economics of the Mid Coast Carbon Repository is driven by the IRS 45Q carbon sequestration tax credit. Enacted in the Bipartisan Budget Act of 2018, an extension of the 45Q tax credit increases the value of geological sequestration to $50 per ton by 2026*. Underwritten at this price point, the annual revenue per ton at a stabilized sales price of 90 cents on the dollar x $50 is $45 per ton of CO2. At a ration of 1:1.7 of biomass : CO2, the credit would yield 3,789 x 1.7 = 6,442 x $45 = $289,895 per year over a 10-year period. In addition, the private market price for carbon offsets is $8-$11 per metric ton**, or 6,442 * $9.5 = $61,200 per year. Combined, that’s $351,094 / $3789 = $92.70 per ton, well above the market price of biomass feedstock of $30-$35 per ton***. This analysis suggests that the project is economically viable.

*https://www.energy.gov/sites/prod/files/2019/10/f67/Internal%20Revenue%20Code%20Tax%20Fact%20Sheet.pdf **https://www.cooleffect.org/content/travel-offset, https://www.terrapass.com/product/business-carbon-offsets ***https://www.eia.gov/biofuels/biomass/#table_data 40