Coalition Welcomes Introduction of House Legislation to Extend 45Q Tax Credit and Expand Eligibility

The following statement on legislation introduced today by David Schweikert (R-AZ), Brad Wenstrup (R-OH) and Carol Miller (R-WV) may be attributed to Carbon Capture Coalition Director Brad Crabtree:

“The Carbon Capture Coalition welcomes legislation introduced by Representatives David Schweikert (R-AZ), Brad Wenstrup (R-OH) and Carol Miller (R-WV) that would make the Section 45Q tax credit permanent and reduce annual CO₂ capture eligibility thresholds to allow for more industrial, electric power, and direct air capture projects to qualify for the credit.

“A multiyear extension of the 45Q tax credit is one of the Coalition’s top legislative priorities. Bipartisan year-end energy legislation passed by Congress in December 2020 provided an urgently needed two-year extension, so that project developers and investors now have until the end of 2025 to begin construction and qualify for the 45Q credit. While this extension is helpful, substantially more time is required for carbon capture, carbon utilization and direct air capture projects to reach economywide deployment and help achieve net-zero emissions by midcentury. This legislation would provide the long-term financial certainty needed to drive significantly greater levels of private investment in the deployment of such projects.

“Not only does the bill extend the window in which project developers can begin construction and qualify for the 45Q tax credit, it increases the value of the credit from $50 to $85 per metric ton for industrial facilities, power plants and direct air capture plants that securely store CO₂ in saline geologic formations and from $35 to $50 per ton for such facilities that store captured CO₂ in oil and gas fields, over the course of the next five fiscal years.

“In addition, the bill reduces annual CO₂ capture thresholds under 45Q to enable a greater range of industrial facilities, power plants and future direct air capture plants to participate and qualify for the credit. In our 2021 Federal Policy Blueprint, the Coalition  recommends elimination of current 45Q thresholds, which serve no obvious public policy purpose, stifle technology innovation and reduce the emissions reductions potential of the tax credit by arbitrarily limiting eligible facilities and technologies.

“This legislation provides yet another example of growing momentum and support from across the political spectrum to enhance the 45Q tax credit, including major bipartisan bills recently introduced in the House and the Senate and key provisions of President Biden’s “American Jobs Plan.” The Coalition continues to work with members of Congress from both sides of the aisle, as well as the Biden administration, to enact critical improvements to 45Q this year. Enhancements to 45Q are necessary to enable economywide deployment of carbon capture, removal, transport, utilization and storage to meet midcentury climate goals, support domestic energy, industry and manufacturing, and protect and create high-wage jobs.”

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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.