Commercial entities and law firms with a stake in environmental regulations should pay close attention to ongoing legislative developments. The first half of 2023 has seen numerous states in the United States continue to build out a regulatory structure around carbon sequestration, largely motivated by the desire to attract and support industries engaged in carbon capture and sequestration (CCS) activities.
According to a report by BakerHostetler on JD Supra, this legislative flurry seems to be a response to the Inflation Reduction Act of 2022, which set the stage for the flow of 45Q tax credits. This significant financial incentive appears to be encouraging states to actively pass carbon sequestration legislation, hoping to bolster the relevant industries in their jurisdictions.
This strategy aims to make these states more attractive to companies that engage in carbon capture and sequestration, activities instrumental in mitigating the effects of climate change. Establishing robust regulatory regimes will not only provide companies with clear operating parameters, but also the assurance of a supportive legal environment.
Such developments illustrate the rise of strategic legislative efforts to combat climate change, drive technological innovation, and also stimulate economic growth. Legal firms and businesses operating in this field need to remain abreast of such initiatives and adapt their operations and strategies accordingly.