H.R. 5883
H.R. 5883
Sponsor:
- Rep. David Schweikert (R-AZ)
Cosponsors:
- Rep. Brad R. Wenstrup (R-OH)
Introduced:
- 2/12/20
WHAT THEY DO
Representative Schweikert’s bill would make changes to the existing federal carbon capture and storage credit to facilitate project development. It would eliminate the commence construction deadline, bringing parity with the recent solar tax credit extension. “Direct air capture” projects, those that filter carbon dioxide directly from the air, would benefit from a higher credit level.
WHY WE LIKE THEM
The expansion of the federal carbon capture credit (“45Q”) in 2018 has spurred new commercial interest in carbon capture and storage projects across the country. In order to be eligible for the credit, projects are required to commence construction by the end of 2023. Over two years after enactment, IRS has yet to issue key guidance for prospective developers on how to claim the credit, which has constrained development. An extension of the credit will provide business certainty for developers and financial backers.
SPECIFICS
- Eliminates the commence construction date for eligible projects
- Increases the credit level for direct air capture projects by 25%
- Reduces the annual capture threshold for direct air capture projects from 100,000 to 50,000 metric tons