Carbon Capture Coalition Urges Congress To Adjust 45Q

Carbon Capture Coalition Urges Congress To Adjust 45Q - Carbon Herald
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Earlier this month, the Carbon Capture Coalition joined over 50 other organizations in a call to Congress for adjustments on the 45Q tax credit. 

The open letter addressed to congressional leadership was co-signed by more than 50 businesses, environmental and conservation groups, unions, and other types of organizations, together representing a unique cross-section of major sectors of the economy.

Some of the signatories include 8 Rivers Capital, BASF, Baker Hughes, CarbonFree Chemicals, Chart Industries, Equinor, Heirloom, Mitsubishi Heavy Industries America, NET Power, Oxy Low Carbon Ventures, Summit Carbon Solution, Svante, United Airlines, and others. 

The aim of the open letter co-signed by the Carbon Capture Coalition, is to get the United States government to prioritize a targeted suite of small-scale adjustments to the federal Section 45Q tax credit.

Namely, the suite is focused on: 

  • indexing 45Q for inflation beginning immediately; 
  • and creating parity between credit levels for projects utilizing captured CO2 as a feedstock to manufacture valuable products and those associated with geologic storage. 

Indexing 45Q for inflation is necessary due to the high levels of inflation we’ve seen this year, which have largely eroded the value of recent 45Q enhancements.

And for the second part of the suite, currently, there is a disparity of $25 per ton of CO2 between projects that store it away permanently and reuse the planet-warming gas to create valuable products. As a result, there is no real incentive for anyone to utilize captured CO2 emissions.

Relevant: New Analysis Claims 90% Of 45Q Credits Were Based On Fraud

And for direct air capture (DAC) solutions, that disparity rises to $50 per ton, posing a major roadblock for the technology’s large-scale deployment. 

In a statement, Jessie Stolark, Executive Director of the Carbon Capture Coalition, said: “The Carbon Capture Coalition is proud to join this impressive list of carbon management supporters from across industry, labor and environmental and conservation organizations nationwide calling for the enactment of a set of pragmatic near-term policies to ensure 45Q delivers on its emissions reduction and job creation potential.

The portfolio of bipartisan carbon management policies included in this letter align with the Coalition’s consensus 2023 Federal Policy Blueprint issued earlier this year and the Coalition is pleased to see the wide-ranging support for these policies.”

Read more: The Carbon Capture Coalition Released Its 2023 Federal Policy Blueprint

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