The Treasury of the U.S. has come out with guidelines for companies using “a federal tax credit” which has been created for spurring investment in “carbon capture and sequestration projects”. The said rules were announced last week whereby aiming to provide a clear guidelines for developers and investors alike on the “so-called 45Q tax credit program” in an attempt to make sure that the projects capture and buy the “amount of carbon they are supposed to before they embark on the costly projects”.
In 2018, Congress expanded the credit of the tax with the aim of brining down cost as well as the risk to “private capital of investing in deployment of carbon capture technology” in a wide range industries starting from electricity manufacturing to fertilizer making units. While Reuters reported:
“The Intergovernmental Panel on Climate Change said in 2018 that the world needs negative emissions technologies such as CCS and direct air capture to meet goals of the Paris Agreement”.
The projects that “sequester carbon” will have to pay “$50 per metric ton of CO2” while in projects wherein carbon gets captured and eventually gets utilised in underground oil recovery process will have a credit of “$35 per ton”. The new proposed measures include “monitoring” projects requirements so as to show “durable geologic storage of CO2 injected underground”, following measuring standards for “utilization of carbon” besides setting up “rules for credit capture”.
In the words of the Carbon Capture Coalition’s Director, Brad Crabtree:
“With the release of this proposed rule, developers and investors now have the remaining critical information they need to continue moving forward on roughly 30 identified commercial carbon capture projects already under development nationwide in response to the revamped 45Q credit”.
The U.S. department of Treasury agreed upon the need for “more transparency” in the “annual reporting of carbon storage” yet it informed that it lacked the “statutory authority” to give out requirements for the same. While Reuters added:
“Last year, the Treasury Inspector General found that 10 companies improperly claimed almost $1.1 billion in 45Q credits over the last few years. Only three of them had monitoring and reporting measures in place”.
References:
reuters.com
In 2018, Congress expanded the credit of the tax with the aim of brining down cost as well as the risk to “private capital of investing in deployment of carbon capture technology” in a wide range industries starting from electricity manufacturing to fertilizer making units. While Reuters reported:
“The Intergovernmental Panel on Climate Change said in 2018 that the world needs negative emissions technologies such as CCS and direct air capture to meet goals of the Paris Agreement”.
The projects that “sequester carbon” will have to pay “$50 per metric ton of CO2” while in projects wherein carbon gets captured and eventually gets utilised in underground oil recovery process will have a credit of “$35 per ton”. The new proposed measures include “monitoring” projects requirements so as to show “durable geologic storage of CO2 injected underground”, following measuring standards for “utilization of carbon” besides setting up “rules for credit capture”.
In the words of the Carbon Capture Coalition’s Director, Brad Crabtree:
“With the release of this proposed rule, developers and investors now have the remaining critical information they need to continue moving forward on roughly 30 identified commercial carbon capture projects already under development nationwide in response to the revamped 45Q credit”.
The U.S. department of Treasury agreed upon the need for “more transparency” in the “annual reporting of carbon storage” yet it informed that it lacked the “statutory authority” to give out requirements for the same. While Reuters added:
“Last year, the Treasury Inspector General found that 10 companies improperly claimed almost $1.1 billion in 45Q credits over the last few years. Only three of them had monitoring and reporting measures in place”.
References:
reuters.com
