Carbon capture advocates, lawmakers call for effective 45Q tax credit implementation

Dive Brief:

  • Advocates for carbon capture technology and a bipartisan group of lawmakers are separately calling on the U.S. Treasury to issue guidance implementing the carbon capture utilization and storage tax credit program authorized by Congress more than a year ago.
  • The Carbon Capture Coalition (CCC) on Monday issued a “blueprint” for federal carbon capture policies, calling for “effective implementation” by the Treasury of the 45Q credit, while expanding federal funding for research and development.
  • On Tuesday, 10 lawmakers who supported the 2018 tax credit sent a letter to Treasury Secretary Steven Mnuchin calling on him to “issue an interim rule” to allow carbon capture projects to move ahead.

Dive Insight:

The carbon capture incentive was approved in February 2018 as part of the the omnibus budget bill, but since then there has been little progress to develop and claim the credits. With projects needed to begin construction by the beginning of 2024, advocates are calling on the federal government to move faster and allow for additional time.

“Last year’s bipartisan reform of the federal Section 45Q tax credit marked a foundational first step in fostering continued growth of the American carbon capture industry,” CCC co-director Brad Crabtree said in a statement. The blueprint developed by the group serves to “outline additional federal policies” needed going forward to build on the credit, he said.

The proposal includes four priorities: ensuring implementation of the credit; providing additional federal incentives to complement 45Q; incorporating carbon capture into broader national infrastructure policy; and expanding federal funding.

Crabtree pointed to federal and state policies that helped scale up wind, solar and other advanced energy technologies.

“Carbon capture needs a similarly comprehensive and ambitious suite of policy tools and incentives to achieve economy-wide deployment in the next decade,” he said.

There are a wide range of groups backing the CCC, including NRG Energy, the National Audubon Society, Shell, the Renewable Fuels Association, Arch Coal and The Nature Conservancy.

A day after the group released its blueprint, lawmakers petitioned Mnuchin to act faster.

“Implementation of this legislation is critical for establishing a domestic market for carbon to reduce emissions, create and preserve jobs, and drive further commercial deployment of carbon capture projects,” the senators wrote. 

The group was led by key proponents of the 45Q credit, Sens. Shelley Moore Capito, R-W.Va., Sheldon Whitehouse, D-R.I., and John Barrasso, R-Wyo. Seven other senators also signed the letter, which requests the Treasury issue an interim rule that would allow carbon capture projects to get underway and assign more staff to the development of the program.  

“It is imperative that developers have IRS guidance in the near term so project sponsors can demonstrate qualification for the credit as they seek investment” the group of lawmakers wrote, based on the construction deadline projects need to meet to qualify.

2019-05-22T07:59:00-05:00Solar News|