While not a regulation, the US federal government is incentivizing investment in carbon capture and sequestration (CCS) via tax credits, as described in an amendment to Section 45Q of the Internal Revenue Code. The tax credit is computed per metric ton of “qualified” CO2 captured and sequestered or used, where “qualified” applies to carbon that would otherwise have been released to the environment. Other features of note are summarized below:
- Applies to carbon capture after October 2008 or that begins construction before January 2026, with higher credit values applying to the latter category
- Applies to power plants that capture at least 500,000 metric tons annually, or 25,000 tons for facilities that emit no more than 500,000 tons annually
- “Other qualified use” of CO2 is limited to certain approved purposes
- Eligibility to claim credit goes to the owner of the capture equipment
- The established claim period is 12 years from the in-service date
For equipment placed in service on February 9, 2018 or later, the current tax credits are as follows:
