Capturing carbon dioxide and permanently storing it below ground is expected to be a critically important tool in the global effort to reduce greenhouse gas (GHG) emissions. The oil and gas industry has been a leader in showing how CO2 –– albeit mostly CO2 that is produced from underground reservoirs, not captured from industrial facilities or power plants — can be used and sequestered via enhanced oil recovery (EOR). The catch is that capturing CO2 and using it for EOR or injecting it into deep wells for eternal storage doesn’t come cheap and so government incentives are required to justify investment in carbon-capture projects. Enter the 45Q tax credit. First made available for U.S. carbon-capture projects in 2008, it has been expanded considerably since then and could soon be expanded further, although its results to date are a mixed bag at best. In today’s RBN blog, we discuss key aspects of the tax credit, how it has changed over time, and what may be coming down the pipeline.
Way Down in the Hole, Part 3 – 45Q Tax Credits Evolve to Incentivize Carbon-Capture Projects
