The Nickel Report

The Department of Treasury and Internal Revenue Service have released Notice 2019-32 seeking comment on key issues to be interpreted in the Section 45Q carbon oxide sequestration tax credit. Congress significantly enhanced the Section 45Q tax credit in the Bipartisan Budget Act of 2018, increasing the credit from $10/ton for CO2 used as a tertiary injectant (i.e., to produce oil or gas) to $35/ton; and increasing the credit for CO2 geologically stored but not used as a tertiary injectant from $20/ton to $50/ton. See our previous blog post here for additional details on the applicable credit amounts for projects before and after enactment of the Bipartisan Budget Act and other credit amount details.

In an article published in Law360, two Hunton Andrews Kurth LLP Partners discuss the passage of the Bipartisan Budget Act of 2018 and its implications for Section 45Q of the Internal Revenue Code. Carbon capture and sequestration supporters expect this to significantly boost deployment of carbon capture and storage (CCS) across the US.

Readers can access the full article here.

As part of the Bipartisan Budget Act of 2018, Congress significantly increased and extended the Section 45Q tax credit for sequestration of carbon oxides. This has been a top priority of carbon capture and sequestration (CCS) supporters for several years.

CCS is considered to be essential to global efforts to reduce CO₂ emissions. The world’s most respected analysis organizations all estimate that fossil fuel use will increase in the coming decades, even with energy efficiency improvements and vast increases in renewable energy.