WASHINGTON, DC – Today, Congressman David Schweikert (AZ-06) and Congresswoman Lizzie Fletcher (TX-07) announced their call for the Department of Treasury and the Internal Revenue Service (IRS) to issue critical guidance on the 45Q tax credit as quickly as possible.
In 2018, Congress passed the Furthering Carbon Capture, Utilization, Technology, Underground Storage, and Reduced Emissions Act (FUTURE Act) as part of the Bipartisan Budget Act of 2018 to enhance the 45Q tax credit to incentivize carbon capture and removal technology deployment in the United States. Before carbon capture projects can begin construction, however, the IRS must issue implementation guidance on a number of key issues, including what kind of projects qualify for the tax credit.
“Carbon capture, utilization, and storage CCUS is a critical part of our path forward in meeting our energy needs and reducing our carbon emissions. I’ve met with the energy companies in my district that are ready to implement carbon capture projects, but because the IRS has not yet issued its guidance, they have had to delay these projects,” said Congresswoman Fletcher. “We cannot afford to waste valuable time. I’m glad to join with Congressman David Schweikert to urge the Treasure Department to issue this critical guidance as soon as possible.”
“I am pleased to join Congresswoman Lizzie Fletcher in sending a letter to the Treasury Department and the IRS to ensure that eligible stakeholders are able to take advantage of the 45Q tax credit as soon as possible. Carbon capture technology will help drive our economic growth and reduce our carbon emissions, making it critical that businesses be able to promptly grow this new market. Two years ago, Congress did its part in adding the 45Q credit to the tax code. It is now up to Treasury and the IRS to swiftly provide guidance to businesses that are ready to develop carbon capture and storage technologies. We can no longer delay implementation of pro-growth policies that will help clean our environment,” said Congressman Schweikert.
Currently, statutory guidelines for 45Q require projects to begin construction before January 1, 2024, and the delay to implement guidance gives private industry a short timeframe to appropriately model their projects and get the capital needed. There are significant concerns that this two-year delay since the passage of the authorizing legislation could hinder the growth of this important new market.
The full text of the letter can be found HERE.
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