The Treasury Department released guidance Friday that provides a “safe harbor” for companies seeking to claim a federal incentive for carbon dioxide captured and stored in geologic formations in 2025.
The interim guidance from Treasury and the IRS was crafted in the wake of EPA’s proposed repeal of the Greenhouse Gas Reporting Program, which requires large industrial facilities to report their climate emissions.
Ending the reporting program would be disruptive to the carbon capture and storage (CCS) industry because the 45Q incentive and EPA’s program are closely linked. Carbon management projects across the United States are buttressed economically by the 45Q tax credit, which was enhanced earlier this year by the Republican megalaw.
While EPA’s repeal of the reporting program isn’t yet final, Treasury’s guidance responds to a potential void in regulations. EPA’s repeal of the reporting program would have included Subpart RR, which applies to facilities that conduct geologic storage of CO2.
