Carbon Capture, Utilization, and Sequestration

Sidley is at the forefront of the rapidly developing carbon capture market, representing clients on the full range of transactional, regulatory, and compliance issues. As industry interest in carbon capture technology continues to grow, the Sidley team handles landmark, market-shaping deals in this area and assists its clients in navigating carbon capture, utilization, and sequestration (CCUS) projects.

Collaborating seamlessly across numerous disciplines, including environmental, project development, project finance, tax, real estate, M&A, regulatory, and government strategies, our team assists clients with innovative strategies to meet reduced carbon and emissions goals, corresponding to an evolving industry standard. With entrepreneurial, civic, and governmental interest in carbon capture technology increasing, we offer a dedicated practice with extensive legal experience handling landmark deals and advising on the legislation, project development, and financing of carbon capture infrastructure, facilities, and storage.

Sidley is counsel to two out of three of the world’s large-scale CCUS projects, all of which are located in North America.

Our lawyers cater specifically to investments in carbon capture projects by:

• Pioneering CCUS Project Development: Sidley’s legal teams are representing developers, sponsors, lenders, and investors in numerous CCUS projects. We provide ongoing advice pertaining to the development and financing agreements; engineering, procurement, and construction (EPC); structuring the IRC Section 45Q tax credits and tax equity financing; and all other related commercial arrangements.
• Harnessing Preeminent CCUS Counsel: Our teams are currently advising on over 16 CCUS matters across a spectrum of disciplines and investments, from joint ventures and innovative financing strategies, to customized environmental, social, and governance (ESG) guidance and permitting issues.
• Cultivating Legislative Strategies: Sidley has had significant involvement in the evolving legislative framework for CCUS facilities. Our policy advisers have strong ties to legislators who are proponents of incentivizing investment in CCUS generally, and the IRC Section 45Q tax credits in particular. Additionally, our partners have been involved in negotiations with the Treasury and IRS, which led to the issuance of notices critical to the advancement of the wind and solar industry. This Treasury and IRS guidance is the basis of the current guidance provided for CCUS projects.
• Representing Mindful Businesses: Our team represents forward-thinking and innovative companies, concerned with their environmental impact and carbon footprints. Sidley is representing companies in matters related to CCUS strategy, including:
  • NRG in connection with the Petra Nova Carbon Capture facility in Texas, the world’s largest carbon capture facility. This project was recognized in 2017 as Project of the Year by JX Nippon and Coal-Fired Project of the Year by Power Engineering.
  • Elysian Carbon Management in its US$350 million capital commitment from EnCap Flatrock Midstream.
  • Counsel to several other developers of CCUS facilities, including Enchant Energy and Svante.

Leading Clients Through the Pathway of Carbon Capture Developments

• Environmental Policy Guidance: Our distinguished team monitors the political landscape and influences policy structuring, providing insight into developments at the federal, state, and international regulatory levels. We have a strong team of more than 100 lawyers, many of whom are former government officials lending an insider’s perspective on the inner workings of environmental statutes, including a senior policy advisor who previously worked as head of the EPA’s Office of Policy. Our team regularly provides clients with strategic advice related to federal and state permitting programs, including a due diligence review of potential CCUS projects and counseling related to federal environmental permitting requirements such as the class II and VI underground injection wells.
• Tax: Our 60 global tax lawyers, including leading renewable energy and tax equity partners, have extensive experience advising clients on all tax aspects of developing, structuring, financing, and investing in CCUS projects, with an emphasis on the structuring of the project and its qualification for the Section 45Q tax credits. Our tax lawyers provide opinions for investment in renewable energy projects and CCUS projects, regularly publishing articles and client alerts on carbon capture developments.
• Regulatory Advice: Sidley has a multitude of experience representing clients before the Federal Energy Regulatory Commission (FERC), regional, and state regulatory agencies and organizations on a full range of energy regulatory, transactional, compliance, and enforcement issues, including barriers facing the transportation and sequestration of carbon dioxide.
• Project Development and Finance: Our lawyers are adept at assisting clients in the development and financing of carbon capture facilities and related transportation, infrastructure, and sequestration commercial arrangements.
• Energy: Few law firms can match the depth and breadth of Sidley’s global energy platform, which provides businesses, investors, and lenders across the energy arena with pragmatic, actionable legal advice. Our team addresses the range of issues that may arise, drawing upon our significant knowledge of the spectrum in renewable energy, private equity, mergers, and financings for energy companies around the world.
• M&A and Joint Ventures: Regularly ranked among the top five M&A firms in the U.S. by industry publications, Sidley offers sophisticated advice and counsel to clients regarding structuring, planning, and negotiating complex transactions, placing particular emphasis on joint ventures, tax equity financing, repowering transactions, and dispositions.