Carbon Capture Coalition Applauds Introduction of Bipartisan Senate Carbon Capture, Utilization and Storage Tax Credit Amendments Act
(Carbon Capture Coalition) Robust Legislation Addresses Top Two Coalition Priorities from New Federal Policy Blueprint — The Carbon Capture Coalition today endorsed the bipartisan Carbon Capture Utilization and Storage Tax Credit Amendments Act. The bill was introduced in the U.S. Senate today by a strong cohort of carbon management champions led by Senators Tina Smith (D-MN) and Shelley Moore Capito (R-WV). In addition to Senators Smith and Capito’s leadership, the bill has received support from a diverse and influential group of Senators: Sheldon Whitehouse (D-RI), Kevin Cramer (R-ND), Brian Schatz (D-HI), John Hoeven (R-ND), Joe Manchin (D-WV), John Barrasso (R-WY), Chris Coons (D-DE), Chuck Grassley (R-IA), Ben Ray Luján (D-NM) and Joni Ernst (R-IA).
“To achieve the full potential of carbon capture to support domestic energy and industrial production, protect and create jobs that pay family-sustaining wages, and achieve net-zero emissions by midcentury, we need a suite of federal policies that enhance and build on the federal Section 45Q tax credit,” said Coalition Director Brad Crabtree. “The Carbon Capture, Utilization, and Storage Tax Credit Amendments Act helps meet this urgent need.”
The bipartisan legislation combines the Coalition’s top two legislative priorities. First, the Act extends the window for projects to begin construction and qualify for the 45Q tax credit by an additional five years—to the end of 2030. The five-year extension provides project developers and investors the financial certainty and time horizon needed to complete current projects and launch many new ones to begin scaling up carbon capture, direct air capture and carbon utilization technologies to meet midcentury climate goals.
Second, the bill establishes a direct pay option for the 45Q and 48A tax credits, allowing recipients to receive the full value of the credits as an estimated payment on their tax return, in lieu of needing to apply the credit to their tax liability. Direct pay allows companies to secure the private investment needed to finance projects, while avoiding the wasteful inefficiencies and added cost of tax equity transactions that constrain the very innovation that these tax credits aim to incentivize.
In addition, the bipartisan Carbon Capture Utilization and Storage Tax Credit Amendments Act provides a critical boost to direct air capture technologies, the early commercial deployment of which is essential to achieving future climate goals. The bill increases the 45Q credit value from $50 to $120 per metric ton for direct air capture facilities that capture and securely store carbon dioxide (CO2) in saline geologic formations and from $35 to $75 per ton for such facilities that store captured CO2 in oil and gas fields. READ MORE
BIPARTISAN PUSH TO EXPAND CARBON CAPTURE INCENTIVES: (Washington Examiner)
Growth Energy Applauds Senate Effort to Extend 45Q Tax Credit (Growth Energy)
Bipartisan Senate bills would boost CCS, EV charging (E&E News)
Bipartisan lawmakers back carbon capture with new legislation (The Hill)
Biden and CCS: Plans, politics, pitfalls (E&E News)
Bill to expand, extend 45Q tax credit introduced in House (Ethanol Producer Magazine)
