Wenstrup, Schweikert Lead Effort to Extend Carbon Capture Tax Credit as Part of GOP Environmental Plan
Washington, February 12, 2020/UploadedPhotos/HighResolution/4bb6d3ff-025c-482b-94ce-325a50ca789e.jpg
WASHINGTON, D.C.—Today, Congressman Brad Wenstrup (R-OH) joined House Republican Leader Kevin McCarthy and others to unveil the Carbon Sequestration portion of the House GOP’s Environmental Plan. Congressman Wenstrup and Congressman David Schweikert introduced legislation to expand the 45Q carbon sequestration tax credits and make them permanent in the federal tax code. This would enhance the value of the credit for critical direct air capture projects and expand its availability to more energy innovators, incentivizing private sector projects to remove more carbon from the atmosphere.
“Our legislation will help take more pollution out of the air as well as boost the economy without jeopardizing jobs or driving up energy costs for hardworking American families and businesses. It will help more companies enter the carbon capture market by creating certainty and predictability as well as by expanding access to the tax credit,” said Congressman Wenstrup. “By incentivizing the private sector to invest in new technology, we can continue meeting our climate goals and solidifying America’s role as the leading exporter of climate solutions. I’m proud to lead this effort with Congressman Schweikert and grateful to Leader McCarthy for spearheading this initiative.”
“By investing in carbon capture technology, the U.S. will reduce our carbon emissions while driving economic growth and creating jobs,” said Congressman Schweikert. “The carbon sequestration tax credit has already helped businesses break into this market, but today’s legislation to make 45Q permanent would give these same businesses the certainty they need in order to keep advancing this technology. Our legislation would also help companies capturing carbon directly from the air have even more access to the tax credit, which presents a much-needed step forward in expanding technologies that will help clean our environment. I’m proud to introduce this legislation with Congressman Wenstrup as part of the responsible energy measure being led by Leader McCarthy, and look forward to advocating for its implementation.”
"This will serve as a remarkable and enduring signal to the market that Republicans in Congress will value carbon emissions reductions while also building on our fossil energy abundance and American industrial strength," said Rich Powell, Executive Director of ClearPath.
House Republicans are putting forth an Environmental Plan consisting of three key solutions: Carbon Sequestration, Clean Energy, and Conservation.
Section 45Q of the tax code currently provides a tax credit for firms that permanently sequester carbon (either underground or inside of other products). The credit is tiered so that carbon sequestered as part of enhanced oil and gas recovery is worth $35 per ton and other sequestered carbon is worth $50 per ton. Current law requires that projects be started before 2024 to qualify.
The bill would enhance the value of the 45Q credit by 25% for both tiers for carbon that is sourced from direct air capture. It would also reduce the minimum amount of carbon that must be sequestered for a direct air capture project to qualify from 100 thousand tons of carbon to 50 thousand tons of carbon. Finally, this legislation would extend the credit permanently.
Text of the legislation can be found HERE.# # #