Bipartisan Legislation Would Strengthen Federal Incentives for Carbon Capture Removal and Storage – Essential for Addressing Climate Change
Today, the Senate introduced the Carbon Capture, Utilization, and Storage Tax Credit Amendments Act.
This legislation would enable carbon capture, utilization, and storage (CCUS) and direct air capture (DAC) projects to access necessary federal incentives for reducing CO2 emissions.
The bill would enhance the 45Q tax credit for CCUS and DAC by extending the commence construction window by an additional five years, as well as increasing the credit value for DAC projects from $50 to $120 per metric ton of CO2 captured and stored in saline formations, and from $35 to $75 per ton for geological storage in oil and gas fields.
It would also create a direct pay option for the 45Q and 48A tax credits and make several technical fixes to ensure that the tax credits are usable.
CCUS will play a key role alongside deep emission reductions in achieving net zero emissions by 2050, as President Biden has called for, to prevent the worst consequences of climate change.
“The Carbon Capture, Utilization, and Storage Tax Credit Amendments Act provides long-needed improvements to the existing 45Q and 48A tax credits, as agreed by both parties in Congress.
While those credits have unlocked funding for numerous carbon reduction projects, the enhancements and fixes in this legislation will enable many more projects to economically capture CO2 from existing emission sources and the atmosphere.
Members of Congress in both parties recognize that achieving U.S. climate goals requires steep reductions in atmospheric CO2.
That entails capturing emissions from point sources like refineries and cement kilns before they are emitted, along with CO2 molecules already in the atmosphere.
Studies show that even partial deployment of the carbon capture and storage plants required to meet our climate goals could create over 61,000 American jobs through 2035. This legislation provides much needed decarbonization incentives while supporting workers across the country.”
Source: wri.org
