U.S. Budget Bill Includes Landmark Carbon Capture Tax Credit to Benefit Economy, Jobs and the Environment
February 9, 2018 | Legislation
Broad bipartisan coalition of industry, labor, and environmental interests backed FUTURE Act to extend and reform a tax credit for carbon capture.
The U.S. budget bill passed by Congress today included the FUTURE Act, legislation introduced last year in the U.S. Senate to extend and reform the federal Section 45Q tax credit.
This revamped 45Q credit will drive private investment in commercial deployment of technologies to capture carbon dioxide (CO2) from power plants and industrial facilities for enhanced oil recovery (CO2-EOR) and other forms of geologic storage and for beneficial uses of CO2. Passage of the FUTURE Act will transform 45Q into an effective tool for creating good-paying, highly-skilled jobs and driving growth in key energy and industrial sectors of the U.S. economy, while significantly reducing carbon dioxide emissions.
The FUTURE Act was cosponsored by one quarter of the U.S. Senate and backed by an unprecedented coalition of diverse energy, industrial and technology companies, labor unions and environmental organizations.
We applaud Congress for passage of this landmark legislation, especially the leadership of lead Senate sponsors Heidi Heitkamp (D-ND), Shelley Moore Capito (R-WV), Sheldon Whitehouse (D-RI), and John Barrasso (R-WY), and of House sponsor Congressman Mike Conaway (R-TX) who led efforts to pass this legislation in their respective chambers.
Key provisions of the FUTURE Act provide needed financial certainty for private investors and developers of carbon capture projects by lifting the current cap on available 45Q credits and increasing their value for each ton of CO2 captured and safely stored or put to beneficial use. The incentive is performance-based, so only projects that successfully capture and store CO2 can claim the credit.
This legislation marks the culmination of more than six years’ work by industry, labor, and environmental participants and their coalition partners to build support for the extension and reform of the 45Q tax credit. Their effort also helped garner bipartisan backing from the governors of Kansas, Montana, North Dakota, Oklahoma, Pennsylvania, and Wyoming who co-signed a letter to Congress this week urging action on 45Q. Over the past several years, organizations such as the Western Governors Association (WGA), National Association of Regulatory Utility Commissioners (NARUC) and Southern States Energy Board (SSEB) have passed resolutions calling on Congress to enact legislation to reform and extend Section 45Q. Legislators in states including Alabama, Kentucky, North Dakota and Texas have also passed resolutions of support.