US House of Representatives Clears Reconciliation Package

The following statement can be attributed to Jessie Stolark, executive director of the Carbon Capture Coalition regarding Thursday morning’s passage by the US House of Representatives of their version of the budget reconciliation package which includes changes to the federal Section 45Q tax credit:

“The Carbon Capture Coalition appreciates that H.R. 1, known as the “One Big Beautiful Bill Act”, as passed by the US House of Representatives yesterday, largely preserves the underlying statute of the 45Q tax credit. Its preservation reinforces the fact that 45Q is pivotal to maintaining the US’s edge in leading technology innovation across the globe, preserving and creating family-sustaining jobs, and supporting domestic energy and industrial production.

“While the bill preserves important elements of the tax credit that have driven sustained project announcements and corresponding capital investments since their enactment in 2022, the broader tax title included significant changes to how taxpayers are able to monetize the credit. This includes phasing out the mechanism for project developers to sell or transfer credits—better known as transferability—in taxable years two years after enactment of the legislation. Transferability has proven its value to project developers, large and small, as an efficiency mechanism allowing developers to avoid costly and inefficient tax equity markets. Without the ability to utilize transferability, we anticipate carbon management project development and deployment to slow significantly, with many, if not most, projects in the pipeline likely not achieving operational status.

“Carbon management project deployment relies on the certainty federal policy provides—any attempt to weaken 45Q and its utility to American businesses threatens the US’s strong reputation as a good place to do business. As more nations around the globe continue to invest heavily in carbon management policy and infrastructure, we are at a critical nexus—Congress must continue to commit to ensuring the 45Q tax credit remains the world’s strongest incentive structure for the development and deployment of these technologies, or risk ceding our global leadership position and the benefits that position brings to the American economy.

“As the reconciliation package advances to the Senate for further negotiations and expected revisions, the Coalition looks forward to working with members of the US Senate to ensure that the 45Q tax credit emerges in the best possible position.”

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The Carbon Capture Coalition (the Coalition) is a nonpartisan collaboration of more than 100 companies, labor unions, and conservation and environmental policy organizations. Coalition members work together to lay the groundwork for the necessary portfolio of federal policies to enable nationwide, commercial-scale deployment of carbon management technologies.