What’s Next for Carbon Management Policy? 

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law. The package took a varied approach to modifying energy tax credits, with many tax credits seeing significant changes that could dramatically impact the deployment trajectory of many clean energy technologies. Despite these changes, notably, the federal Section 45Q tax credit was preserved in full and even slightly enhanced—an outcome that could not have been achieved without the strong and coordinated efforts of the Coalition, our members, and the wider carbon management advocacy community. 

Our collective efforts to preserve the 45Q tax credit within the OBBBA ensured that 45Q emerged intact with essential enhancements, particularly for more nascent utilization technologies. As such, 45Q continues to be the market signal for the nationwide deployment of carbon capture, direct air capture, transport, reuse, and storage technologies. This effort shows that when we work together, we can achieve progress on policies that have longevity and durability across the political spectrum, as we have done repeatedly over the years.   

We must now do everything we can to ensure announced projects move toward final investment decision, construction, and operation to cement carbon management technologies’ role in providing affordable, reliable, and abundant clean energy. The more projects we see deployed across sectors, the more costs begin to reduce by “learning by doing,” and, subsequently, the greater the confidence in the technology from investors. Equally importantly, realizing successful projects is paramount to community and stakeholder buy-in. 

Securing Robust Appropriations and Permitting Reform 

Following the passage of the OBBBA, Congress turned its attention toward annual appropriations negotiations for fiscal year (FY) 2026. As the end of the current fiscal year approaches on September 30, the annual appropriations cycle continues to be an area of contentious debate. Throughout these negotiations, the Coalition continues to make a case for preserving robust annual funding for baseline carbon management research and development and unobligated balances for IIJA-funded carbon management programs at DOE.  

To progress on priorities in the 2025 Federal Policy Blueprint, the Coalition submitted three appropriations requests to more than 50 congressional offices, aiming to sustain core carbon management research and development programs at the Department of Energy (DOE) and bolster the review and decision-making process for Class VI injection wells at the US Environmental Protection Agency (EPA). 

Additionally, the Coalition seeks to unlock carbon management project deployment through changes to the current permitting regime, which continues to be a topic of discussion where both Democrats and Republicans have sought to collaborate. Although the OBBBA did not ultimately contain any permitting provisions, bipartisan members of Congress are very interested in addressing the mounting challenges of building energy infrastructure in this country due to the current permitting framework.  

Now that Congress has returned from the August recess, we will continue supporting efficient and timely permitting of Class VI wells and state primacy reviews. Furthermore, we are considering strategies to help policymakers understand challenges with the timeline to permit Class VI wells, and expect to revisit a proposal for an optional pathway for the federal siting and construction of interstate CO₂ pipelines – a position the Coalition endorsed in 2024.   

Necessary Regulatory Frameworks and Building Markets for Carbon Management Technologies 

Over the next several months, the Coalition’s regulatory work will comprise a mix of reactive and proactive measures to ensure that we shore up and protect the existing regulatory framework and make progress where possible. This includes defending the importance of those parts of the EPA’s Greenhouse Gas Reporting Program (GHGRP) relevant to carbon management and the section 45Q tax credit, in light of a possible repeal of the GHGRP.  

The nation’s regulatory regime for carbon management deployment also needs to be updated. The administration has recently signaled that it is moving forward with several relevant regulations. The Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued two advanced notices of proposed rulemaking for the repair and safety criteria for CO₂ pipelines. The Coalition is invested in ensuring that CO₂ pipelines retain their excellent safety record as this system scales. Additionally, the administration recently included long-awaited regulations for the offshore storage of CO₂ to allow storage on the outer continental shelf (OCS) in its spring regulatory agenda. Lastly, the Treasury and IRS must issue guidance for the most recent changes to 45Q in OBBBA and enhancements to the credit in 2022 to provide clarity to project developers. 

As far as building new markets for carbon management technologies, growing domestic electricity demand presents an opportunity to position carbon capture and storage as key to providing clean baseload capacity. Electricity demand is projected to rise between 35 and 40 percent by 2040, driven by demand from AI and data centers and the continued electrification of the economy. Because of these forces, natural gas will remain a central part of the US electricity mix through the middle of the next decade. Carbon management technologies address emissions from the continued deployment of natural gas-powered electricity. Still, much work must be done to ensure the industry can meet the speed and scale required by current electricity demand.  

Conclusion 

While the Coalition and our members have much work to do to support the continued development and deployment of carbon management technologies, we are optimistic about the near-term potential to continue the positive momentum created by long-standing bipartisan support of these essential technologies.  

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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.