Carbon Capture Coalition Applauds Introduction of Bipartisan Senate Carbon Capture, Utilization and Storage Tax Credit Amendments Act

Robust Legislation Addresses Top Two Coalition Priorities from New Federal Policy Blueprint

WASHINGTON, DC – 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. It increases the credit value from $35 to $75 per ton for such facilities that store captured CO₂ in oil and gas fields, or for beneficial utilization as fuels, chemicals and useful products

Furthermore, the legislation reforms the Section 48A investment tax credit to allow companies access to existing federal incentives to complement 45Q in financing the retrofit of existing power plants with carbon capture technology.

Recent analyses by the Rhodium Group show that deployment of carbon capture and direct air capture projects and associated CO₂ transport infrastructure will generate tens to hundreds of thousands of jobs paying above average wages. In fact, 45Q has already spurred development of over 30 publicly-announced carbon capture projects spanning industry, power generation and direct air capture. Passage of this legislation will accelerate development of many more projects, delivering significant jobs, investment, and emissions reduction benefits.

“At a time when workers and communities across our nation struggle to recover from the pandemic, this legislation will help safeguard high wage jobs at industrial facilities and power plants and generate new jobs and investment, while helping put American industry on track to reach net-zero emissions,” said Crabtree. “The Coalition’s 80-plus companies, labor unions, and NGOs urge Congress and the administration to include these critical provisions in the next major legislative package now being developed to address COVID-19 economic recovery, infrastructure and climate.”

Find the bill text here.

Read a one-pager on the bill here.

Statements on the Bill from Supportive Organizations

Don Gaston, President & CEO, Prairie State Generating Company

“The bi-partisan support of the 45Q and 48A tax credits have opened the door and created real opportunity for making commercial-scale carbon capture projects a reality in the United States. Establishing a direct pay option for 45Q and 48A would create an even broader opportunity for funding carbon capture infrastructure—providing non-taxable entities, such as such as public power entities and rural electric cooperatives, an equal incentive mechanism.”

Tom Conway, International President, United Steelworkers

“Carbon capture and direct air capture technologies are critical for protecting and creating good manufacturing jobs as the nation and the globe work to reduce greenhouse gas emissions. The Carbon Capture, Utilization, and Storage Tax Credit Amendments Act includes increased credit values for direct air capture projects and an extended commence construction deadline. This will enable the large-scale deployment of carbon management technologies, which, particularly in industrial facilities, will help retain and create high-wage jobs.”

Lee Beck, CCUS Policy Innovation Director, Clean Air Task Force (CATF)

“Carbon capture is critical to tackling climate change, and 45Q is the most important carbon capture incentive in the world. This extremely important legislation optimizes 45Q it by extending the commence construction deadline and allowing compatibility with the 48A incentive — providing direct pay option for both. By introducing new 45Q values for direct air capture, it also reflects the importance of tailoring 45Q to different applications of carbon capture, removal, and storage technologies, as not all of them are at the same stage of deployment, and their costs vary as well. Together with the SCALE Act, this legislation forms a must-pass policy package for the large-scale deployment of carbon capture, removal, and storage for a net-zero US.”

Jennifer Holmgren, Chief Executive Officer, LanzaTech

“LanzaTech is grateful to this bipartisan group of Senators for sponsoring such important legislation. If enacted, these critical incentives for carbon capture and utilization will speed the deployment of the innovative technologies needed to address climate change. The US should be leading this effort and today’s introduction gets us one step closer to scaling these solutions.”

Claude Letourneau, President & CEO, Svante Inc.

‘’Svante applauds the introduction of the Carbon Capture, Utilization, and Storage Tax Credit Amendments Act of 2021, which provides key next steps to building a commercially viable CO₂ marketplace. Enacting a direct pay option for the 45Q tax credit is needed to attract capital to finance first-of-kind commercial scale carbon capture and storage facilities, such as Svante’s novel CO₂ capture technologies that will be crucial to decarbonizing emissions-intensive industries, including cement and hydrogen production.’’

Jason Albritton, Director of Climate and Energy Policy, The Nature Conservancy

“We are at an exciting moment where we can meet the challenge of climate change by creating a future with cleaner air and better energy choices. And we can do it while bringing new jobs to the table. The 45Q tax credit is an important tool that will support the deployment of technologies that capture and safely and securely store carbon. We applaud the bipartisan commitment to creating the right incentives to support the transition to a clean economy.”

Michele Stockwell Executive Director Bipartisan Policy Center (BPC) Action

“BPC Action supports the Carbon Capture, Utilization and Storage Tax Credit Amendments Act introduced by Sens. Smith (D-MN) and Capito (R-WV),” said Michele Stockwell, Executive Director of BPC Action. “The legislation is an important update to the 45Q tax credit which is critical for financing carbon capture technologies, including direct air capture, and will support American industries to create important new clean energy jobs. Leveraging American innovation in carbon capture and removal will be an important element of the economic recovery while reducing emissions.”

Shannon Heyck-Williams, Director of Climate and Energy Policy, National Wildlife Federation

“Congress took a major step forward on climate in 2018 by establishing a federal tax incentive for carbon capture, use, and storage, but we need to do more to help get these critical projects off the ground to address the climate crisis,” said Shannon Heyck-Williams, director of climate and energy policy at the National Wildlife Federation. “The bipartisan 45Q Carbon Capture Utilization and Storage Tax Credit Amendments Act – like its House counterpart, the ACCESS 45Q Act – would extend the life and value of this credit and make it more flexible so its benefits can be realized and this climate-critical technology can be deployed in industries across the country.”

Sam O’Neill, Senior Vice-Preisdent, Government Affairs, Portland Cement Association

“PCA fully supports the introduction of the Carbon Capture, Utilization, and Storage Tax Credit Amendments Act of 2021. Any long-term carbon reduction strategy for the cement industry will require significant advances in and greater use of carbon capture, use and storage technologies. The enhancements to the 45Q tax credit in this legislation will support PCA and our members efforts to achieve carbon-neutrality throughout the cement and concrete value chain by 2050 and we welcome its introduction.”

Bruce Rastetter, CEO, Summit Agricultural Group

“Development of large scale carbon capture projects such as Summit Carbon Solutions will be greatly accelerated by the Carbon Capture, Utilization, and Storage Tax Credit Amendments Act.  45Q tax credits incentivize development, but modifications are necessary to provide economic certainty, simplify monetization of tax credits, and reduce inefficient transaction costs.  This Act achieves those goals and will have a significant positive impact on the agriculture and biofuels industries, and on carbon reduction and job creation nationwide.”

James Slevin, President, Utility Workers Union of America

“The 45Q tax credit furthers carbon capture deployment at a critical moment when there’s strong, bi-partisan leadership advocating this technology and a swell of public support for policies that lower emissions while preserving and creating jobs and economic benefits. We are hopeful this legislation is one of many measures we can rely on in the near-term to create and sustain family-supporting jobs as we achieve net-zero emissions.”

Richard Jackson, President Operations, U.S. Onshore Resources and Carbon Management, Occidental

“The Carbon Capture, Utilization, and Storage Tax Credit Amendments Act builds on the success of 45Q with critical policy enhancements that will accelerate deployment of carbon capture technologies, which are key to Occidental’s ambition to reach net-zero emissions before 2050. The bill’s provision for direct pay of the 45Q tax credit is game-changing for enabling efficient and flexible use of the credit and will unlock project development opportunities, and the enhancement for Direct Air Capture will help us launch large-scale DAC technology. We applaud the leadership of Senators Smith and Capito, and we look forward to working with them on these important reforms.”

Bob Perciasepe, President, Center for Climate and Energy Solutions (C2ES)

“The 45Q Carbon Capture, Utilization and Storage Tax Credit Amendments Act provides smart, targeted legislative updates in support of technologies that will be crucial to meeting our climate goals. The economic challenges created by the pandemic make extending the 45Q tax credit and making direct cash payments available to project developers vital steps to advancing these technologies. These steps, along with an expansion of the Direct Air Capture credit, will boost the long-term competitiveness of domestic industries and enable those industries and the communities they operate in to thrive in a low-carbon future.”

Heather Reams, Executive Director, Citizens for Responsible Energy Solutions (CRES)

“Using technology to pull carbon dioxide from the atmosphere, or prevent it from escaping in the first place, and repurpose it for beneficial purposes is practical idea worth championing. By offering a tax credit to companies participating in carbon capture and sequestration, section 45Q activated one of America’s best assets – our innovative spirit – for the good of our planet. The 30 projects launched since this provision was first instituted, and the untold others still in development, deserve every opportunity to continue building upon their early successes. Commonsense solutions—like the 45Q tax credit—solve big environmental challenges without heavy-handed, top-down mandates from Washington.

CRES applauds Sens. Shelley Moore Capito (R-WV) and Tina Smith (D-MN) and urges Congress to extend the 45Q carbon sequestration tax credit to support America’s innovators, America’s environmentally responsible companies, and America’s future.”

Rich Powell, Executive Director, ClearPath Action

“Carbon capture projects are often billion-dollar investments that require long-term certainty to pencil out and attract investment, and this extension to 45Q can make a massive impact – supporting more than 3 gigatons of emissions reductions. 45Q is so effective because it can incentivize emissions reductions in both the power sector and the industrial sector. This bipartisan proposal will also clear the path for even more financing of clean energy infrastructure outside the traditional energy sector, as evidenced by recent project announcements from Blackrock and Microsoft.”

Brett Kerr, Vice President, External Affairs, Calpine

“Significant reductions in carbon emissions are not only possible but necessary. In order to get there we need an “all -of-the-above” strategy including carbon capture and economy wide electrification. This legislation is a step in the right direction and Calpine applauds the efforts of Sens. Tina Smith (D-MN) and Shelley Moore Capito (R-WV) for taking this crucial step.”

Rich Nolan, President & CEO, National Mining Association

“Carbon capture is recognized as the most vital technology needed to meaningfully reduce global emissions levels and, yet, when you look around the U.S., we don’t have capital investment. This bipartisan legislation is an essential step to drive progress and help the U.S. bolster its position as a leader in advanced energy technologies while also protecting and creating American jobs, and ensuring ongoing access to affordable, reliable electricity in the U.S.  Policymakers of all parties need to come together behind the Carbon Capture, Utilization, and Storage Tax Credit Amendments Act to provide the business certainty and incentives required by investors to proceed with these much-needed projects here in the U.S.”

Emily Skor, CEO, Growth Energy

“As our nation moves to decarbonize the transportation sector and achieve clean energy and climate goals, real-world data continue to prove the important role that biofuels play,” said Growth Energy CEO Emily Skor. “Not only do biofuels like ethanol significantly reduce greenhouse gas emissions in the transportation sector, but more and more ethanol producers are looking towards capturing CO₂ from the production process and storing it underground or using it for other commercial applications, including dry ice production for COVID-19 vaccination storage.”

Steve Oldham, CEO, Carbon Engineering

“Carbon Engineering is very encouraged by the measures in the Carbon Capture, Utilization, and Storage Tax Credit Amendment Act, and by the bi-partisan support behind the bill. This act includes a number of helpful measures that will advance U.S. support for direct air capture technology, which in turn, can play a critical role in cutting greenhouse gasses, supporting good paying jobs, and enhancing American energy competitiveness. We thank all those who have collaborated across the aisle to introduce this bill; it is a win-win for the environment and the economy.”

Christina DeConcini, Director of Government Affairs, World Resources Institute

“The Carbon Capture, Utilization, and Storage Tax Credit Amendments Act provides long-needed improvements to the existing 45Q and 48A tax credits to provide for much needed decarbonization incentives, while supporting workers across the country. Members of Congress in both parties recognize that achieving U.S. climate goals requires steep reductions in atmospheric CO₂. That entails capturing emissions from point sources like biorefineries and cement kilns before they are emitted, along with CO₂ molecules already in the atmosphere. Studies show that even partial deployment of the carbon capture and storage plants required to meet our climate goals could create over 61,000 American jobs through 2035.”

Ryan Fitzpatrick, Director, Climate and Energy Program, Third Way

“Senators Smith and Capito are doing something really important here. By making tax credits like 45Q more robust, accessible, and efficient, they’re guaranteeing greater deployment of carbon capture and carbon removal projects that are vital for meeting emissions targets, creating good-paying and often union jobs, and helping a larger swath of America’s communities and workforce to benefit from the shift to a clean energy. These are exactly the kinds of solutions we need right now stay on track for our climate goals while staying competitive in the global economy.”

Tom Dickson, CEO, New Energy Risk

“New Energy Risk supports the Carbon Capture, Utilization, and Storage Tax Credit Amendments Act. As an insurance solutions provider who is contributing to the de-risking of $3B+ of carbon capture projects, we see how a longer development timeline and increased revenue certainty enabled by a 45Q extension and direct pay, coupled with increased credit values, would positively contribute to the financing and completion of these exciting projects.”

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The Carbon Capture Coalition is a nonpartisan collaboration of more than 80 businesses and organizations building federal policy support for economywide deployment of carbon capture, removal, transport, utilization, and storage. Our mission is to reduce carbon emissions to meet midcentury climate goals, foster domestic energy and industrial production, and support a high-wage jobs base through the adoption of carbon capture technologies. Convened by the Great Plains Institute, Coalition membership includes industry, energy, and technology companies; energy and industrial labor unions; and conservation, environmental, and energy policy organizations.