Carbon Capture Coalition Statement on the Introduction of the Accelerating Carbon Capture and Extending Secure Storage Act through 45Q (ACCESS 45Q Act)
December 3, 2020 | News
Carbon Capture Coalition Director Brad Crabtree released the following statement on today’s introduction of direct pay and 45Q extension legislation by Representatives David McKinley (R-WV), Marc Veasey (D-TX), Cheri Bustos (D-IL), Alex Mooney (R-WV), Lizzie Fletcher (D-TX), Kelly Armstrong (R-ND), Mike Doyle (D-PA) and Jack Bergman (R-MI):
“The 80-plus companies, unions and NGOs in the Carbon Capture Coalition recognize and thank Representatives McKinley, Veasey and their fellow cosponsors for their continued bipartisan leadership in support of carbon capture and for today’s introduction of the ACCESS 45Q Act (Accelerating Carbon Capture and Extending Secure Storage Act through 45Q). This legislation would enhance the effectiveness of the federal Section 45Q tax credit for geologic storage and beneficial use of carbon captured from industrial facilities, power plants and through direct air capture.
“The ACCESS 45Q Act combines the Coalition’s top two legislative priorities by providing for both a ten-year extension of the commence construction window for 45Q, as well as a direct pay option for the 45Q credit. The Coalition calls on House and Senate leaders to incorporate the critical 45Q extension and direct pay provisions of the ACCESS 45Q Act in any upcoming legislative vehicle.
“The ten-year extension of 45Q in this legislation is essential to ensuring that project developers and investors have the financial certainty and a sufficient time horizon to complete their current projects and to initiate new ones. Large-scale, capital-intensive carbon capture, removal, utilization and storage projects require years to plan, engineer, permit and finance, yet nearly three years of the original six-year authorization of the 45Q tax credit has been lost to delays in Treasury and IRS guidance and rulemaking. Project developers must now begin construction by the end of 2023 or fail to qualify for the credit—a risk exacerbated by the economic uncertainty of the COVID-19 pandemic.
“The direct pay provision included in the ACCESS 45Q Act would give carbon capture project developers the option of receiving an estimated payment on their tax return in lieu of monetizing the tax credit. Over the long-term, direct pay for 45Q would make the incentive much more cost-effective and impactful for project developers and the federal government alike. Direct pay would allow companies to secure the private investment needed to finance projects, while avoiding the inefficiencies and substantial additional costs of tax equity transactions that unnecessarily burden and constrain the very efforts to innovate and deploy carbon capture technologies that the 45Q tax credit aims to incentivize. In addition, direct pay would significantly reduce near-term uncertainty and barriers faced by project developers in obtaining private investment due to COVID-19.
“The combination of direct pay and a ten-year extension for 45Q in this legislation would help ensure that the more than 30 publicly-announced carbon capture, removal and geologic storage projects in the U.S. continue to move forward and avoid cancelation, as well as spur development of the many more projects. Passage of this legislation would help put the U.S. on a path to achieving midcentury climate goals, while spurring investment and creating high-wage jobs for American workers and their communities as they seek to recover from the COVID-19 pandemic.”