U.S. Senator Kevin Cramer (R-ND), a member of the Senate Banking and Senate Environment and Public Works (EPW) committees, issued the following statement on the U.S. Department of the Treasury issuing a notice of proposed rulemaking on carbon capture tax credits for businesses today:
“The Treasury Department delivered important, long-awaited regulations today. Carbon capture tax credits are meant to incentivize investment in carbon sequestration technology, but North Dakota’s coal, ethanol, and energy producers have been waiting to receive these rules to ensure they invest properly. I appreciate Secretary Mnuchin and the Trump Administration delivering this proposed rulemaking, and I look forward to reviewing the details with interested stakeholders to ensure they work for North Dakota.”
The 45Q carbon capture tax credit was extended and expanded as part of the FUTURE Act (Furthering carbon capture, Utilization, Technology, Underground storage, and Reduced Emissions Act) in 2018, a bill to incentivize innovative technology for industry to capture, store, and utilize carbon. Since the FUTURE Act’s passage, energy producers and utilities have been waiting for Treasury to write the rules for how to use it. Senator Cramer has worked closely with the Administration from his seats on the Banking and EPW committees to get this guidance across the finish line.
According to the Treasury Department, the two new credits for carbon oxide captured offer up to $50 per metric ton of qualified carbon oxide for permanent sequestration and $35 for Enhanced Oil Recovery purposes. These new credits have no limitation on the number of metric tons of qualified carbon oxide captured. Prior to the change in law, carbon capture was limited to a total of 75,000,000 metric tons of qualified carbon oxide. The new law also expanded carbon capture to include qualified carbon oxide, which is broader than qualified carbon dioxide.