Carbon capture, utilization and storage (CCUS) projects are eligible for the Section 45Q tax credit, but it’s difficult for developers to claim this credit for them. Clarifying the IRS rules regarding the 45Q tax credit would help make CCUS projects commercially viable sooner. Capturing more CO2 will help reduce emissions.
The rules governing Section 45Q tax credits are meant to ensure that carbon capture, utilization and storage (CCUS) project developers can only claim the credits for eligible projects. Loosening the rules, as this bill would do, could allow developers to claim the 45Q credit for projects that don’t permanently sequester carbon.