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Daily Digest for

July 18, 2025

Tax Credits Drive U.S. Carbon Capture Deployment

The U.S. Energy Information Administration (EIA) has published its Annual Energy Outlook 2025, introducing a new Carbon Capture, Allocation, Transportation, and Sequestration (CCATS) module to model carbon capture trends.

  • CO2 capture at electric power and industrial facilities is projected to increase through the 2030s due to higher tax credit values under the 2022 Inflation Reduction Act (IRA), peaking at 1.5%–3.5% of energy emissions in the late 2030s.
  • 45Q tax credits provide $60/ton for EOR and $85/ton for saline storage; credits are available for projects starting before January 1, 2033, and last up to 12 years, with CO2 capture expected to decline as credits expire after the 2040s.

EU F-Gas Ban Drives SF6-Free Data Center Upgrades

The European Union has announced a ban on new SF6-based medium-voltage (MV) switchgear up to 24kV, effective January 1, 2026, as part of the F-gas Regulation to reduce greenhouse gas emissions from power infrastructure.

  • Data center electricity demand in Europe is projected to rise from 100 TWh in 2022 to 150 TWh by 2026, driven by digitalization and AI, necessitating new power generation and infrastructure.
  • SF6-free MV switchgear, such as Schneider Electric’s AirSeT range, is now available and deployed globally (over 40,000 units), offering lower lifecycle costs (20-30% savings) and eliminating high end-of-life recycling costs (10-20% of initial equipment cost), supporting compliance and sustainability goals.
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