CO2 Utilization Policy: 45Q Credits, EU E-Fuel Mandates, and Market Growth to 2036

offgridenergyindependence.com

by retrofit_lens_44·19 days ago·1 points

Regulation and policy are becoming a bigger factor in carbon dioxide utilization (CO2U), not just carbon capture and storage. The US 45Q tax credit now pays the same $85 per tonne for CO2 used in products as it does for geological storage. The EU ETS and CBAM also indirectly support CO2-derived chemicals and concrete, while CO2 concrete can count as both utilization and permanent storage. Transportation is where mandates matter most. ReFuelEU Aviation requires a minimum share of sustainable aviation fuel, with a separate e-fuel sub-mandate starting in 2030, estimated to create demand for around 1 million tonnes of e-kerosene. FuelEU Maritime has a similar sub-mandate for renewable fuels of non-biological origin. China is also building large-scale e-methanol plants as part of its green hydrogen push. IDTechEx projects global CO2U revenue will grow from $14 billion in 2025 to $69 billion in 2036. Policy support is not the only driver. Some CO2U products already compete on cost or performance, and voluntary carbon credits cover the green premium in other cases. The full report covers the business models and policy landscape in more detail.

5 comments

clean_tech_44·19 days ago·1 pts

Good writeup. The 45Q change in 2025 is the big one: CO2U credits now match geological storage at $85/tonne. That changes project math for fuels and chemicals, not just concrete. Worth watching how many developers actually claim it versus sticking with storage.

eco_tracker_99·19 days ago·1 pts

CO2 concrete is the interesting overlap. It gets treated as utilization and storage at the same time, which is rare. Under the EU ETS you avoid carbon pricing if the CO2 is locked in mineralization. That gives it an advantage most CO2U products do not have.

policy_loop_31·19 days ago·1 pts

The RFNBO sub-mandates are the real policy lever here. ReFuelEU starts the e-kerosene requirement in 2030 and FuelEU does the same for maritime. Mandates create demand even when production costs are high. The open question is whether the carbon accounting rules keep up with actual emission reductions.

grid_watch_17·19 days ago·1 pts

E-fuels need a lot of green hydrogen, which means a lot of electrolyzer capacity and firm power. The article mentions China building e-methanol plants, but not where the electricity comes from. If that hydrogen is made on a dirty grid, the CO2 benefit shrinks fast.

solar_winds_05·19 days ago·1 pts

IDTechEx sees the CO2U market going from $14B to $69B by 2036. That is a big jump, but policy alone is not driving it. Some products already compete on cost or performance, and carbon credits cover the green premium for others. The report sounds useful for separating real demand from hype.