Carbon Capture Coalition Transmits Direct Pay and Transferability Priorities to Treasury and IRS  

On November 22, the Carbon Capture Coalition responded to IRS Notice 2022-50, “Request for Comments on Elective Payment of Applicable Credits and Transfer of Certain Credits”. The Coalition appreciates the Internal Revenue Service’s (IRS) work to implement the updates to the federal Section 45Q tax credit made law in August 2022 through the Inflation Reduction Act, which is essential to the economywide deployment of the full suite of carbon management tools, including carbon capture, removal, transport, utilization and storage.

Commercial-scale deployment of carbon management technologies is fundamental to meeting the Biden Administration’s 2030 emissions reduction target and net-zero by 2050 goal. In its most recent WGIII Climate Change 2022: Mitigation of Climate Change report, the Intergovernmental Panel on Climate Change (IPCC) further reaffirmed the central role that these technologies must play in capturing carbon dioxide (CO2) from emitting sectors, as well as directly removing legacy emissions from the atmosphere to reach midcentury climate goals.

As Treasury and IRS look to implement the clean energy tax provisions contained within the Inflation Reduction Act of 2022, it is paramount that guidance related to the implementation of the direct pay and transferability provisions are swiftly promulgated, so that project developers can access the full suite of 45Q enhancements as Congress intended with the enactment of these provisions. In particular, enacting a direct pay option for 45Q was the Coalition’s top legislative priority in the 118th Congress.

The Coalition will provide further comment on the questions posed by IRS in Notice 2022-57, “Request for Comments on the Credit for Carbon Oxide Sequestration”.

You can view the Coalition’s comments to the IRS on Notice 2022-50 here.

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Convened by the Great Plains Institute, the Carbon Capture Coalition is a nonpartisan collaboration of more than 100 companies, unions, conservation and environmental policy organizations, building federal policy support to enable economywide, commercial scale deployment of carbon management technologies. This includes carbon capture, removal, transport, utilization, and storage from industrial facilities, power plants, and ambient air.