Spotlight Activity: Congress Expands and Increases Section 45Q Tax Credit for Carbon Capture and Storage
In February 2018, Congress passed the FUTURE Act as part of the Bipartisan Budget Act of 2018. It included a provision to expand and increase the tax credit for the sequestration and long-term storage of carbon oxides, also known as carbon capture and storage (CCS).
When it was originally created in 2008, the Section 45Q tax credit set a rebate of $10 per carbon that was captured and used for the production of other energy sources, and $20 per ton for carbon that was captured and permanently stored, e.g. in geologic formations deep underground. Under the new bill, the credit will be increased to $35 and $50 respectively by 2026, and inflation-adjusted thereafter.
The credit will particularly benefit Wyoming, which has the largest carbon capture and storage research in the country, as well as other states with strong innovation in this technology including Kansas, Montana, North Dakota, Oklahoma, and Pennsylvania.
The bill was sponsored in the Senate by leaders from both parties: Heidi Heitkamp (D-ND), Shelley Moore Capito (R-WV), Sheldon Whitehouse (D-RI), and John Barrasso (R-WY). It was also supported by Mike Conaway (R-TX) in the House of Representatives.
Status: Right Direction
The expansion of the credit is a landmark move for CCS technology in the US, as it will help to bring down the cost of the process under existing technology and encourage innovation to make the technology cheaper and more efficient in the long run. CCS is an essential element to global emissions reductions, and will greatly help the US to meet its goals under the Paris Agreement. Congressional support for this technology sends a signal to American businesses and individuals that the government supports carbon emission reduction technologies and is the first step towards putting a price on carbon nationally.
Contact your Senators to voice your support for the bill with the following message:
Carbon Capture and Storage is an essential technology to reduce carbon emissions and to meet our pledge under the Paris Agreement. I support the expansion of the Section 45Q tax credit for CCS and the Senate’s decision to expand it.
Tel: 202 224-3121 (Capitol switchboard)
Mail: Senator (first & last name), U.S. Senate, Washington, D.C. 20510
Leave a Reply
You must be logged in to post a comment.