Carbon Capture Coalition Provides Feedback to Treasury and IRS on Recent 45Q Enhancements

April 21, 2023 | Uncategorized

The Carbon Capture Coalition recently submitted comments to the U.S. Department of Treasury (Treasury) and Internal Revenue Service (IRS) on enhancements made to the 45Q tax credit in the last Congress.  These enhancements will further incentivize new carbon capture, removal, reuse technologies, and associated transport and storage projects, to reduce emissions and enable meeting net-zero targets and midcentury climate goals, strengthen and decarbonize domestic energy, industrial production, and manufacturing, and retain and expand a high-wage jobs base.

The Bipartisan Budget Act of 2018 significantly restructured the section 45Q credit to incentivize the development and deployment of carbon management technologies across sectors. Congress further expanded and increased the section 45Q credits in the Inflation Reduction Act, to make the program more easily accessible for sectors that must deploy carbon management to meet net-zero targets, such as industry, energy, and manufacturing, as well as to make projects utilizing earlier stage technologies like direct air capture and carbon reuse more economical.

Together with the federal investments made in carbon management in the Infrastructure Investment and Jobs Act, this framework is now recognized as the most comprehensive and robust federal policy support for carbon management technologies in the world. We applaud Treasury’s work in beginning to implement the enhancements to section 45Q and the previous work on guidance related to the credit. The Carbon Capture Coalition appreciates the opportunity to submit these comments to Treasury related to section 45Q.

For several months, members of the Carbon Capture Coalition engaged in a collaborative effort to develop consensus recommendations to inform and assist Treasury and the IRS in their development of regulations and guidance to implement the expansion of the section 45Q tax credits that will encourage the deployment of a broad array of carbon management projects.  The Coalition looks forward to the issuance of regulations that will facilitate additional, much-needed investment in carbon management technologies.

To read the Carbon Capture Coalition’s comments to Treasury and IRS click here.