Search

Blueprint Frames Carbon Capture as Critical for Climate


RTO Insider recently published a story about an update on CCUS in Congress:


February 24, 2021

By K Kaufmann


Bipartisan Coalition Targets Direct Pay and Other Expansions for 45Q Tax Credit

The Carbon Capture Coalition has two top priorities for the current session of Congress: providing a direct-pay option for the 45Q tax credit and expanding project eligibility for the credit via a multiyear extension of the deadline for beginning construction.

And the most likely vehicle for passage of one or both policies could be a bipartisan infrastructure bill, said Sen. Tina Smith (D-Minn.), speaking at a media preview of the coalition’s 2021-2022 Federal Policy Blueprint on Tuesday.


“My hope and, I think, the hope of many of us is that that big infrastructure package can address directly the needs we have to move toward a clean energy future, including technology-neutral tax credits and other infrastructure,” Smith said. “We are hoping to get to work on this in real time after we move through and get this COVID relief package done.”

Originally passed in 2018, 45Q is a tax credit specifically for carbon-capture technologies: $50/ton for carbon stored in underground saline formations, and $35/ton for carbon used to make other products. The credit got a two-year extension in the year-end omnibus legislation passed by Congress, and the IRS released final rules on it earlier this year.


But, the coalition argues in the blueprint, “direct pay is a more cost-effective and efficient way of incentivizing carbon-capture projects,” attracting more investment and increased deployment of projects. Similarly, according to the blueprint, the deadline extension is needed because “complex and capital-intensive carbon-capture projects can have lead times of several years before beginning construction” and still might not be able to qualify for the credit.


Read more.